Keystone Pipeline Was Meant To Relieve North America's Oil Glut

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Due to reduced consumer demand and more fuel efficient cars in the market, it seems like we've now reached the point where Americans aren't filling up our tanks fast enough to support the greed of Big Oil.

Several articles have been floating around the Web that show the Keystone pipeline was meant to act as an oversupply relief valve by shuttling existing domestic oil oversupplies out of Canada and the Midwest, thus boosting prices. In hearings last May and December, TransCanada officials admitted to US legislators that the pipeline will indeed increase the price paid for Canadian oil in the Midwest, but still made a case that resulting tighter oil supplies feeding local demand would eventually bring prices down.

Oil execs even said they'd be willing to pay higher pipeline tariff costs for using the Keystone XL pipeline - just to bring the price of oil down. Ohhh, bless these generous and kind-hearted souls.

CS Monitor Excerpt:
“Prices at the pump will drop when America’s largest refining region (the Gulf Coast) becomes less dependent on the world’s highest priced crude (OPEC),” he wrote. “Foreign importers will have to cut their prices if they want to compete with the cheaper Canadian crude.... We would argue the overall US price per barrel will drop as refiners pay less for foreign and domestic oil competing with a higher volume of cheap Canadian oil.”

Ahhh, "if" they want to compete with the cheaper Canadian crude. Who said they want to compete?

So, why doesn't our current "oversupply" of "cheap" Canadian crude mean America is less dependent on OPEC oil and equate to lower prices now? Why do we have to get rid of our oversupply to bring our prices down? Why are we participating in the global oil market (OPEC, etc.) if the only thing it does best is boost crude oil prices?

Smart planet Excerpt:
... the United States has become a net exporter of fuel for the first time in almost two decades according to new data.

According to the U.S. Department of Energy, America — the world’s largest consumer of oil — exported 54,000 barrels more of petroleum products each day in February than it purchased on the global market.

Drill, baby, drill. Because China needs oil?

Over a year ago, I made what I call an easy prediction that Big Oil is fully prepared to take gasoline to $5 - $7 a gallon if Obama's economy starts rolling. There are no valid market reasons for the prices of oil and gasoline to be where they are. Expect record profits ...again.

Additional:

Blog Critics Keystone XL Pipeline Lies and Higher Midwest Gas Prices

Big Oil Will Likely Pass Tax To Customers

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WSJ Excerpt:
Allowing oil companies to pass along the new 2 percent tax to consumers at the pump removes any questions about its legality, said Rep. Jennifer Shilling, D-La Crosse. Shilling, who sponsored the change, said oil companies could choose to absorb the tax or pass it along up to 4 cents per gallon.

Absorb the tax? Not likely.

Before it could have its day in court, Wisconsin Democrats caved in to Big Business interests on the tax of gross receipts from oil revenues. The failure to implement the no-pass-through provision proved what many have come to know and fear - that big business and corporations pay zero to very little taxes in the state of Wisconsin. And if you try to make them pay - they'll sue.

Give Bush Credit Or Blame For Oil Prices?

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Global oil prices were relatively low and steady for over 20 years before Bush took office. Since then, prices have been rising steadily culminating to an all-time high of $147 a barrel. At the beginning of his final six months in office, prices collapsed and oil is now selling for less than $50 a barrel.

Cash Liquidity Traded For Oil Liquidity

Some think that since he caught much of the blame for the high prices, he then deserves much of the credit for the low price today.

Others, including myself think Bush and his oil executive cabinet and Energy Task Force policies drained the cash liquidity out of the world economy through a highly speculative and unregulated “phony free market,” thus turning a minor U.S. mortgage meltdown into possibly a global economic depression.

Who cares about energy independence when oil is this cheap?

Read Additional "Drill, Drill, Drill" Abandoned

Wisconsin Republicans Vote Against Domestic Oil Production

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Another week has come and gone without the Democratic-led Congress able to wean the country off of foreign oil and force oil and gas companies to “use or lose” the lands they have leased from the federal government. The bill H.R. 6515, also requested that Alaskan oil cannot be exported.

The Hill Excerpt:
In addition to requiring energy companies to either drill on 68 million acres of approved and leased lands or vacate their leases, the new Drill Act also included language to speed up the leasing of 20 million acres in the National Petroleum Reserve-Alaska, to reconstitute the ban on the foreign export of Alaskan oil and to urge the president to facilitate the completion of oil and gas pipelines from Alaska.

The three Wisconsin house republicans helping stall energy legislation and voting against the "Drill Act" were Sennenbrenner, Petri and Ryan.

Free Republic Excerpt:
A similar partisan dynamic is stalling energy legislation in the Senate, where Democrats and Republicans are at a standstill on a measure (S 3268) to tighten regulation of energy futures trading. Democrats acknowledge the measure is only a short-term, partial solution to the rising cost of gasoline, but Republicans have threatened to thwart action on the bill, unless GOP members are allowed to offer amendments that would open new areas for oil drilling.

In the House, nearly all Republicans and eleven democrats voted “no.” As record gas prices continue to soak family budgets and leave municipalities in dire straits, Republicans have found an excuse why not to drill and why not to lower gasoline prices. They found their excuse by opposing the democrats plan, and are willing to exploit those misconceptions for the sake of their corporate donors and political careers.

Bill O’Reilly A Closet Populist?

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The most recent Bill O'Reilly rant titled, Fight back against Big Oil offers a clear idea just how loosely his head is bolted on. For instance, Billo really thinks that…..

Townhall.com Excerpt:
If a big oil company wants to tighten supply, for example, it's a snap. Just slow down the refinery process by ordering extra "maintenance" or something.

Think about it. If Big Oil would want to tighten supply (yet avoid shortages at the pump and really, really bad publicity), why in the world would they purposely slow down the refinery process when all they need to do is raise the prices slightly. Again and again if necessary till they balance the supply with the demand. In our digitally interconnected world, THIS is the snap. Why in the world would they want to send the message they can’t meet the demand at the current prices by slowing the process – they’d lose money. You don’t make $15 billion quarterly profits by deliberately failing to supply the product……..at any price. You sell what you have at the MAXIMUM the market will bear. Even if it hurts. But Billo still believes and that’s good enough for his Klingons.

But his rant gets better because near the end he not only encourages people to empower themselves, to do a left-wing thing, he actually says if he were president he’d name the greedy CEO’s making millions off of us poor schmucks. My friends at Leftyblogs must be finally getting to this guy. Empowering the people? Strike at the profiteers? Bill O'Reilly? An idealist? A populist?

Instead of taking the typical GOP stance and blaming gasoline taxes, regulations or liberals, Billo asks the people to get ANGRY. Oh, please!

Townhall.com Excerpt:
But if Americans would get angry and begin punishing the oil bandits, prices would drop.

Punishing? Gasp! Watch what you say there, Billo. You're only one more verb away from becoming a person of interest by the authorities.

Are you saying people should organize a mass boycott? How socialist of you! How left-wing of you? A consumer strike? What about all the investors, risk-takers and poor seniors collecting Big Oil dividends? Remember, mega-profits are a sure sign those special and talented CEO's are worth their millions according to Wall Street.

Well, I guess when a self-righteous whacko like Billo tells people to get angry, it’s ok. But when some citizen rises up and pushes back at the greed-fueled power train running downhill on greased rails, well, that’s different. Only then, it must be the irrational outburst of a combative and negative person with an axe to grind. Perhaps in Billo's case, they’d be right.

Bush Mid-East Trip One For The Books

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Money Trumps Peace

Arms Dealer asks For Increase In Oil Production And Gets Snubbed.
After insisting to the American people there’s nothing he should do to interfere with the “free markets” of global oil, Bush now asks OPEC to pump more oil? Has he suddenly found some new religion?

Saudi's looking For Stability:
"There have been many attempts ... to create doubt about the long-term viability ... of oil," Naimi said. "As a result of these misplaced fears, billions of dollars have been spent on research for alternative fuels ... thus far with minimal success and high costs. ... We must recognize the central role that oil will continue to play."

In other words……..they know oil is king. When supply and demand is manipulated by greed and fear, it really doesn't matter, because they're all free market principles.

Saudi's looking for stability:
Asked about gasoline prices -- and if Americans might ever again see prices below $2 per gallon -- the soft-spoken minister laughed and said: "If I knew the answer to that question, I would be in Las Vegas rather than here."

When you're sitting on billion$ of barrel$ of oil that of which industrialized and wasteful nations cannot live without, who needs Las Vegas?

Instead of telling Bush to pick up and take his war machine with him out of the region in order to stabilize global oil markets, they end up giving him this........and with their profits and wealth, who could blame them? "Instability" like this should never go unrewarded.

Socialism At Core Of Progress

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The past couple of Sunday Janesville Messengers contained several articles written by right-ring think tankers that truly demonstrated the quality and depth of their wayward logic. In the same spirit, the November 18th edition continued with a rather confusing rant by Richard W. Rahn, an adjunct scholar of the Cato Institute. He begins……

Oily OPEC Excerpt:
Socialism always plants the seeds of its own destruction, and state-owned oil is no exception. Most people do not realize that about 90 percent of the world's liquid oil reserves are controlled by governments or state-owned companies.

In his mind, any natural oil resources owned by anything other than private entities are possessed under the banner of socialism. His reasoning is ……

Oily OPEC Excerpt:
The high price of oil is a direct consequence of artificial supply constraints imposed by the Organization of Petroleum Exporting Countries and other countries, including the United States, and the incompetence and mismanagement found in most state-owned oil companies.

OPEC does manipulate supply, but that doesn’t make them socialistic, in fact, the freedom to manipulate supply to increase prices and profits is one of the sacred tenets of not socialism…..but capitalism. But he continues…….

Oily OPEC Excerpt:
A decade or two from now, the socialist states will have severe regrets for their current misbehavior, and this is why. When prices rise, people seek alternative sources and substitutes for the high-priced commodity. When oil prices are above $30 or $40 a barrel, suddenly the Canadian oil sands and Colorado oil-bearing shale become economic, and those reserves are larger than known liquid oil reserves.

Of course I’m under the impression that Rahn hates socialism and would like nothing less than to see it disappear from the planet, but throughout his rant, he completely ignores the fact that the price of oil is dictated none other than by free market future's speculators. There is no physical shortage of oil.....yet.

And forget $40 oil, we’re nearly at $100 already and because of the falling dollar, oil may now have to hold around $80 a barrel for any alternative fuel source to be cost effective/profitable. Not only that but since the price for a barrel of oil is set unrealistically high by socialists in his view, I have yet to see our government install pricing control restraints (socialism) to keep the cost of our natural oil resources for domestic use below the global price. In fact, U.S. oil usually sells for a few bucks more. But Rahn says there’s a silver lining…..

Oily OPEC Excerpt:
Now, for the really good news. The new car you purchase a decade from now is almost certainly to be totally electrically powered.

There you go. OPEC is keeping the price of oil artificially high to usher in energy independence and technological progress, those darn socialists will regret all this. To top it off they're willingness to rake in short-term profits will only lead to their own demise. At this point, I don't know what Rahn is hoping for.

Oily OPEC Excerpt:
As people move to electric cars, the need for gasoline and imported oil will quickly disappear. Nuclear and clean coal plants must expand to produce the additional electricity, but they produce energy at a fraction of the cost of petroleum.

Is Rahn bragging or complaining? Remember all of this progress resulted from actions caused by none other than greedy profit taking socialists.
This entire article makes no sense. But I will give it this consolation; it's either an abstract piece of propaganda encouraging people to embrace expen$ive oil (remember the goal - the end of socialism by suicide) OR it's just the mindless chatter of a thinker who's been in the tank too long.

Either way, twenty years from now when America is completely energy independent with abundant cheap fuel - according to Rahn's reasoning - we can thank a socialist.

Read related: OPEC To Abandon Dollar

If Waiting For CAFE - It's Too Late

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Wednesday’s Janesville Gazette posted an article in their editorial slot written by the Dallas Morning News about the consequences of post peak-oil.

Over a Barrel Excerpt:
"I am sorry to say this, but we are headed toward really bad days," a prominent energy economist told Time magazine last week. That was no alarmist talking. It was Fatih Birol, the chief economist for the International Energy Agency, an oil industry organization whose annual World Energy Outlook report is widely considered a reliable indicator of petroleum supplies.

This was a reasonable perspective, but considering that the high price of oil and not an actual physical shortage of it prompted this warning, I was left with the notion that this message was just another shot at expanding domestic oil drilling. Which is something I believe would have zero impact on lowering prices.

But more importantly, if the Gazette editors, their Janesville readers, the local UAW including corporate GM give this short message any real urgency, and not the speculation it may be built on, they had better not wait for the democratic Congress or Sen. Russ Feingold to bully them with CAFE standards into saving themselves - by then it'll be too late.

---

Some Amusing Sound Offs

JG Sound Off:
On Smokers: To all Wisconsin smokers, as of Jan.1, stop buying lottery tickets. That will help offset the tax increase we unfairly have to pay. Lets not help out others who don’t care that we’re being extorted and harassed. -- anonymous

Let me get this straight. You want cigarette smoking lottery ticket buyers who can’t break their nicotine addiction to suddenly find the willpower to stop their gambling habit? – just so you don’t help others. Oh, well of course!

JG Sound Off:
On City Budget: Let’s review; city faces $1 million dollar budget shortfall. Reported in the Gazette, city puts $1 million in escrow for aquatics facility, which only a few people want, I might add. Mr. Scheiffer, do any idea lights go on? -- anonymous

According to some in Janesville, you’re taking it out of context. Haven’t you had the time to sit down and educate yourself by watching the Janesville budget hearings and learning sessions televised on public access JA-12? Oh, I’m sorry – I forgot. The Janesville city council went out of their way to deny those prying contextual cameras and microphones into the room. If they say you have it all wrong – thank them.

JG Sound Off:
On Christianson Column: Brian Christianson’s sinister disrespect and sarcastic attitude (Page 8A, Nov. 5) are disgusting. – anonymous

I actually feel slighted by this. I don’t know about the disrespectful part, but the sinister sarcasm and the disgust are nearly complimentary around here and something I thought I had locked down all to myself.

Greenspan Reverses Truth About War

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Congressional Republicans "swapped principle for power," he wrote. "They ended up with neither. They deserved to lose." And though he urged Bush to veto bills to exercise fiscal discipline, the president did not follow through, and that was a "major mistake."

Since we know Greeenspan wasn’t implying that Bush veto security and war effort expenditures it becomes clear that Greenspan thought Bush should veto domestic spending, otherwise known as discretionary non-military spending. Which in this case under Bush was being slowly diverted anyways to the war or outright defunded. It becomes reasonable to assume that Bush created deficits with his tax cuts, annual Iraq war appropriations and “loose” money induced inflation. In other words, Bush did the exact opposite of what should have been done but what Greenspan was proposing was even worse. He wanted to go much further and basically suffocate federal spending.

By far, the most important statement with any merit in Greenspan's book is…….

War for Oil “I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” – Alan Greenspan

No double-talk here, just plain easy to understand English. Can you imagine all the snide remarks coming from the right after that one? ...... Why does he hate Bush? Why does Greenspan hate America. Why does he hate our troops? The right-wing blackballers of truth must have stepped in quickly because less than two days later, Greenspan is claiming that securing Iraq oil was not the administrations motive.......IT WAS HIS?!

Greenspan Backtracks:
The fiscal guru quickly backed off that assertion by suggesting that while securing global oil supplies "was not the administration's motive," it should have been. He said when he made the argument that ousting Saddam Hussein was "essential" because of the threat he posed to U.S. oil interests in the region, White House officials told him "Well, unfortunately, we can't talk about oil."

Is that like trying to assasinate Hugo Chavez as an “essential” action because of the perceived threat he poses to Bush Administration oil interests in the region? The more Greenspan talks to reverse the truth, the more he ends up just burying himself.It also turns out that Greenspan's Federal policy over interest rates may have been was a huge contributing factor in the collapse of the sub-prime mortgage industry. Of course, just because Greenspan gave greedy lenders an inch, doesn't mean they should have taken a mile.

Petraeus Report:
Without guaranteed access to Iraq's oil, we absolutely could not maintain our military and economic dominance of the world. Vice President Cheney has known this, even spoken publicly about it, for many years. And why else would he have convened a meeting of Big Oil representatives within his first month in the White House to pore over maps of Iraq's oil fields, as if that were the top priority of the administration?

Benchmark Pressures Iraqis To Forfeit Oil

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One of the eighteen “benchmarks” Iraqis must achieve as a precondition to U.S. troop withdrawal is the acceptance of an oil franchise agreement authored by the Dick Cheney Energy Task Force. If you recall, this "secret" meeting involved a geological survey of Iraq laid out like a pirate treasure map with Cheney and Big Oil executives placing markers and staking claims years before the invasion.

The Energy Taskforce framework was then used as the roadmap to guide Congress to write the current benchmark for Iraq, loosely referred to as the hydrocarbon agreement. The agreement is expected to achieve the transformation of Iraq's oil system from a nationalized model -- all but closed to U.S. oil companies -- to a privatized model open to foreign corporate control. At least two-thirds of Iraq's oil would be open to foreign oil companies under terms they usually only dream about, including 30-year-long contracts. Most oil-rich countries reject the privatized model for obvious reasons.

AlterNet Excerpt:
With few exceptions, the American press has adopted the administration's language and continually and virtually exclusively refers to the oil law as a revenue sharing measure -- ignoring completely the fact that Iraqis would only be able to share the revenues left over after the foreign oil companies received their very sizable cut.

The sizable cut foreign oil companies expect to receive from the Bush Administration’s hydrocarbon “benchmark” amounts to about 63 out of approximately 80 known mother lode oil fields leaving the Iraqis control of only seventeen.

If the Iraqis don’t sign this agreement, I would expect come November that the Bush Administration will announce that an increase in troops is necessary, either with re-enforcements or another “surge” to put pressure on Iraqis to fulfill these benchmarks.
In America, the corporate-backed government-fed media passes off the troop surge as the only way to defeat the insurgency and stabilize Iraq. While in Iraq, it is becoming increasing reasonable to consider the surge pressure as a form of blackmail to fulfill certain benchmarks, among them of all things - a contract for oil.

Although most of us knew the invasion of Iraq was about oil, it sometimes isn’t enough to just say it. The truth about the Iraq Hydrocarbon Law is just another piece of the puzzle in the avalanche of evidence supporting our worst fears.

Read additional: Expert Opinion On Iraq Hydrocarbon Law

Read additional: Whose oil is it anyway?

Iraq War About Necessity - Not 9/11

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After reading this article at a news blog site…..

Rising Tide Of Corn Excerpt:
The nation's unquenchable thirst for gasoline -- and finding an alternative to what's been called our addiction to oil -- has produced an unintended consequence: The cost of the foods that fuel our bodies has jumped. Beef prices are up. So are the costs of milk, cereal, eggs, chicken and pork. And corn is getting the blame.

I had this exchange.
…..I wrote: Wal-mart has proven that Americans don't give a rats-ass about where something comes (China) from or how it was made (sweatshops). We want value and low, low prices. What's the goal? Cheap fuel? Arab oil was the cheapest fuel in the world until Bush started spilling our blood for it.

I get tired of people blaming Bush for "spilling our blood over oil". Where were you when 9/11 took place? And don't think they're not planning more attacks. These idiots need stopped. Bush is no coward. He had enough guts to stand up to them? If Clinton had done something about it we might not be in this mess now. Nobody likes to be at war but sometimes it's a necessity. – blogger

To which I responded….
During 9/11, I was with you and Bush. I had no clue. What's your point? Bush has yet to stand up to those who attacked us, in fact he may very well be afraid since he complains that the democrats "embolden" our enemies. Brave people don't worry about emboldened enemies if they have a plan to defeat them. Besides, if you don't think Bush is spilling our blood for oil then why do we need ethanol to save us from something that's NOT killing us. Again, Arab oil was the cheapest in the world when we paid for it in cash.

Petraeus: 10 more years of war in Iraq? Bush said we'll be there for 50 years. They must have adjusted the outlook after reviewing Iraq's geological petroleum reserve survey.

Big Oil Knows Which Cow To Milk

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This headline caught my eye.

Dean Foods cuts forecast as milk prices soar

I became suspicious after reading this and thought how come we never saw the headline, “Exxon cuts forecast as oil prices soar.”

Dean Foods Co., the biggest U.S. milk processor, cut its profit forecast for the second time this year because of soaring raw-milk costs and lower prices for organic dairy products. The shares fell the most in a month.

High costs never stopped Big Oil from turning in record profits. Ok, besides milk being a perishable, there are other differences between the two industries but, high raw material costs are high raw material costs no matter what you're trying to sell.

Throughout the article, I substituted the word “milk” with “oil” and “diary” with “refinery” and wa-la. For some reason, the milk industry and the oil industry seem to work off of two completely different business theories. Sure, I know this sounds elementary but in one industry, high raw material costs lead to losses, while in the other, high raw material costs lead to record profits.

"Supplies are going to be tighter because when the weather heats up you don't get as much production from your cows," said Peter Turk, a dairy trader with Rice Dairy LLC in Chicago. "The market is going to be higher."

When Big Oil blamed the weather (hurricanes) or shortfalls in production (pipelines bombed or refineries shutdown), not only did the price of gasoline skyrocket, but so did the profits. Why should Big Milk be any different?

"It has become increasingly likely that conventional raw-milk prices will reach all-time highs by the third quarter," Engles said in today's statement. "We expect this steep rise in dairy costs to put pressure on Dairy Group profit growth, especially in the second and third quarters." Prices already are at or near records.

High raw material costs along with higher distribution costs coupled with inflation usually lead to fewer profits – unless - you’re Big Oil.

Big Milk should deal with higher raw material costs like corporations deal with taxes on profits – just pass them onto the consumer. Expect milk prices to reach record levels.

Oil Is Cheap - Its The Barrels That Are Priceless

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THE NUMBER ONE REASON why gasoline prices are high and expected to get higher is because RAISING THE PRICE IS THE ONLY WAY BIG OIL CAN DISCOURAGE DEMAND AND ARTIFICIALLY BOOST SUPPLY HIGH ENOUGH TO AVOID REAL TIME SHORTAGES AT THE PUMP ACROSS THE COUNTRY. Expect record profits. That this is happening without terror attacks, oil pipeline explosions and hurricanes only means that the profits posted this year will probably be a world record AGAIN.

Big Oil experts and economists have no scapegoats to blame it on this time. So for once we are at least hearing half the truth about the insufficient number of refineries which in effect keep production on a tightrope, as I have been saying for the past year. The price of gasoline is high, but not because BIG OIL has to pay more for distribution costs, raw product, infrastructure or manpower. But this time around, I don’t think prices will plummet in Rock County to $2.19 a gallon by Oct. 20th like it did last year because THIS YEAR IS NOT AN ELECTION YEAR.

Post Election Gasoline Prices:
VP Dick Cheney held secret meetings years ago with Big Oil in the White House and it can be safe to assume that Big Oil has been given free rein to do whatever it takes to ensure a steady supply of gasoline at the pump. If you have to raise prices to accomplish some level of control over consumption, then by all means, do it. The Bush Administration could care less about high prices, that's “free market” in their view, just don’t repeat the energy crisis the nation experienced in the 70’s with widespread shortages, long lines and rationing. It would doom his presidency. But we'll never know for sure because, the meetings were "secret."

INSTEAD OF platform drilling off the coasts or violating the sacred wilderness of Alaska, we should petition the U.S. Government to build at least four new refineries with taxpayer money to process the current glut of oil that privately held refineries can’t or won’t. Certainly the refining business is profitable as witnessed by Big Oil’s $10 billion quarterly profits and besides, if Big Oil can’t supply the country with enough gasoline, they leave no choice but to have the U.S. government intervene to guarantee a sufficient supply.

By the way, Congress will be allowing for more oil exploration in the Gulf of Mexico and Alaska, but will this bring the cost of gasoline down? Ahh – no. Will it at least help us to become more oil independent? Ahh - no. The bottom line on this resource give-away is profits – nothing else. Arabs have the cheapest oil in the world no matter what anyone says.

DUE TO logistics, good percentages of Alaskan oil are being sold for a higher premium to countries like Japan and China. The Alaskan oil is then indirectly replaced by purchasing cheaper Arab oil to be used in the states. The more Alaskan oil pumped, the more dependent we become on the Arab oil needed to replace it, while greedy oil companies pocket the difference. But the Bush administration will swear that we need to open protected wildlife areas to wean ourselves off of terror sponsored oil. They have even defended the sale of Alaska Oil as a way to decrease our trade deficit with Japan. Their excuses to exploit our resources for the sake of America in the name of profits never ends.

WATCH FOR Republicans/Conservatives to once again blame gasoline taxes for the high price and demand for the taxes to be rescinded. In reality, this slightly lower price would work temporarily against Big Oil's objective to dampen demand thus forcing Big Oil to boost the price to the taxed value, but instead of the state collecting much needed revenue, Oil profits grow even larger.

Wisconsin Corporate Profits Subsidized By Taxpayers

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One of the few times the Gazette didn’t attempt to hide their loyalities was displayed in Thursday’s editorial titled,” Tax on Big Oil fuels problems on many levels.” Here, their readers were educated with the views of a Big Oil lobbyist as a legitimate response to the tax plan idea Doyle proposed on record oil profits. It really is a profits versus people debate, and offering their editorial column as a forum for special interests should only further diminish the Gazette’s credibility and power of their editorials.

JG Editorial Excerpt:
After all, barrels of cash seemingly flow from the wallets into the pockets of the five major petroleum refiners…..

This doesn’t seemingly happen…..it does happen.

JG Editorial Excerpt:
Prices at the gas pump seemingly go up and down arbitrarily regardless of oil prices.

Again, they don’t seemingly go up arbitrarily…….they do go up……arbitrarily.

JG Editorial Excerpt:
So it seems fair to tap into that cash to prop up our state’s transportation fund.

Actually I always thought it was Big Oil’s responsibility to help pay for roads, I had no idea they were not propping up the transportation fund.

JG Editorial Excerpt:
Dan Gunderson, a lobbyist for big petroleum companies, met Tuesday with the Gazette Editorial Board and confirmed many of our suspicions and concerns.

If there’s one person the average consumer wants to hear from to help make up their minds about taxing record runaway corporate oil profits its a…..corporate lobbyist!! The Gazette would have faired better here if they asked a used car salemen.

JG Editorial Excerpt:
By the way, contrary to public opinion, the five largest oil companies don’t own any of Wisconsin’s 3,300 retail gas outlets.

Then why does Gunderson find it important enough to even bother coming here? The fact is, Doyle’s tax on Big Oil profits has nothing to do with ma and pa, franchise owners or point of use taxes at all. That's the best part, local businesses will not be taxed.

State of the State Speech:
Tonight, I propose an oil company assessment of two and a half percent per barrel to support our transportation needs.

The Gazette then proceeds to scare investors, claim one tax will lead to another and then finally offers that Doyle’s plan may in fact be unconstitutional. Do you picture the oil lobbyist nodding in agreement? Just the idea that the Gazette bothered to use these old and worn-out fear tactics and then expect their readers to be led around by the nose by a Big Oil lobbyist should convince everyone that…Doyle’s idea just might float.

In a related AP story on page 3 in the local section titled ”Businesses lag in taxes paid,” it turns out that Wisconsin businesses pay only 35% of state taxes while the national average is 40%.

JG Excerpt:
But Jeff Schoepke, director of tax and corporate policy for Wisconsin Manufacturers and Commerce, the state's largest business group, said taxes on its members are high enough and any increase would be passed on to shareholders and consumers.

We must assume then that shareholders and consumers in peer states have been paying the extra 5% all along. Depending on who you believe, individual state income tax filers have been subsidizing corporate profits in Wisconsin to the tune of $520 million annually or as high as $800 million annually.

The writer of this article chose to describe the WMC as simply the “state’s largest business group” while the study group, the Institute for Wisconsin’s Future was described as a “Democratic-leaning group.” But it didn’t end there. An entire paragraph at the end of the article was dedicated to informing the reader that the Institute for Wisconsin’s Future was founded by several union organizations and listed them all by name.

Poor Direction For Cheap Fuel

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The March 3rd Janesville Gazette editorial titled ”Focus on fuel economy is critical here,” was an exercise of the usual talking points blaming either tough emission standards or labor unions (liberal policy) for the poor mileage American vehicles squeeze out of a gallon of gas. But they failed to explain the very reasons why Americans should want better fuel economy in the first place. In fact the only reason we are having this discussion is not because we are dependent on foreign oil, it’s just because gasoline prices are both unstable and high.

We seem to be under the impression that better average national fuel economy means traveling costs per mile will drop when indeed nothing could be more deceptively false. It also seems to hold that if American vehicles suddenly doubled their average mileage per gallon from 20 to 40 overnight, thus cutting consumption in half, the price of a gallon of gas should plummet because of the huge, huge gasoline glut. True supply and demand results. But we know that’s not how things work with Big Oil and chances are more than likely that the price of a gallon of gas would double, refineries would close from severe under-capacity and we would be exactly where we are today – production on a tightrope and a near doubling of their all infamous 9% profit margin to 15%. Sure, this would help cut greenhouse emissions but Americans want better gas mileage NOT to save gas or cut emissions, they want it to save money. They won’t save money with the current greedy Big Oil corporate policies.

When the Republican base or Bush enablers discuss our current situation with high gasoline prices they first bring up the principle of supply and demand. Low oil supply and high global demand equals high prices. Simple law of economics they say. Except that there is NO shortage of crude oil, the crude oil arrives here, the (high) price is paid – no shortage. If they are corrected in their choice of words that we have what appears to be deliberate manipulation of gasoline production, they immediately cry foul and reply it is because Democrats, liberals and environmentalists have banned new refineries or made them cost prohibitive. Too expensive to build with all those environmental protections they say. But if they can’t build a single new refinery while they are reaping the largest profits known to mankind, it’s obvious they never intend to build one at all – ever. In fact, Big Oil is elated that they have someone to blame other than themselves for the lack of refineries. When in truth, environmentalists have demanded stricter smokestack emissions and other refinery standards simply to protect human health and the general environment. Bush wants these refinery standards dropped in the name of lower costs to the oil companies, not lower gasoline prices, which means even greater profits and of course, filthier air.

This is the wrong direction to take and it is actually hurting the economy and job creation. Here’s why. When liberals convinced Congress to enact strict pollution standards on automobiles in the 70’s, the car companies vehemently opposed the change and said it would be too expensive. In 1975, anti-environmentalists and liberal bashers warned that a new car with a catalytic converter would hit your pocketbook an additional $400. But what happened back then? Whole new industries were developed to design and manufacture EGR valves, pollution pumps and expensive platinum catalytic converters. People paid the price to get cleaner air even if it meant worse gas mileage. But, thousands of people were put to work. Contrary to mainstream beliefs, environmentalist policies created jobs. We gained all around with cleaner air and jobs that never existed before.

Similarly, today’s argument seems to be centered on making vehicles more fuel efficient and again, corporatists and anti-liberals use the same old talking points from over 30 years ago.

JG Editorial Excerpt:
The goal would also hit your pocketbook. Use of expensive technology would cost you $1,300 more for a car and almost $2,000 more for a truck.

The GOP and their supporters are holding up the same progress to build energy star cars and new clean refineries with chimney scrubbers, catalysts and particulate recycling, primarily because their base wants it this way. The oil companies know whether they build new refineries or high mileage cars, the results will be the same. Production on a tightrope will end and they will have to earn money the old fashioned way, not by price gouging under the guise of tight supplies and fear. Need I say more? America needs new leadership with fresh ideas….. if not, it’s like they say, you may as well get used to it.

Ask a Republican: People or Profits?

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Once upon a time in America, you weren’t faced with a choice of either people or profits. You had them both. During that period, sometime before Ronald Reagan, the American economy was driven by employees and customers with profits however small or big shared by nearly everyone, relatively speaking. We didn’t know how good we had it back then, and certainly don’t realize how poor we have it now.

Today, American companies and manufacturers flee to areas around the world, employing cheap labor and operating in unregulated environments, all in the name they tell us, to sell for less. Things which really count for our quality of life that cannot be outsourced like gasoline, energy, hospitals, healthcare, housing, pharmaceuticals, private utilities, and local business monopolies are all still operating in that prosperous American economy, an economy based on selling for the highest prices the market will bear. All the while serving customers competing in a global economy whose compensation and wages are based more and more on the lowest the market will bear. Things are more complicated than that for sure, but grasping this simple concept is a big step to understanding why some of us are doing so well, while others are doing so poorly.

This is why I believe Democrats are trying to help level the playing field for everyone, before its too late. They are not afraid to use government as the great equalizer for the good of its people and recognize that greedy capitalists and corporatists are draining hard earned dollars from those living here on global market wages.

In his State of the State speech, Gov. Doyle says he may have found a way to tax one of the worst offenders of this imbalance without passing the tax onto consumers.

State of the State:
Tonight, I propose an oil company assessment of two and a half percent per barrel to support our transportation needs. It will be illegal for them to pass the fee on to consumers … with criminal penalties if they break the law. Let’s turn the tables on big oil, and give Wisconsin families a break.

If it is legal and durable, it is possible that Gov. Doyle may have found the “Holy Grail” everyone has been looking for to exert fiscal justice against price gouging and windfall profits at its highest levels.

Naysayers and supporters of profits over people have tremendous wealth and media tools at their disposal and will try to quash this plan before it gains any traction. They will try to pretend that taxes collected by the state somehow benefit Doyle and not the people. Nothing can be more preposterous. That other states have tried similar ideas with limited success is no cause for concern, Wisconsin Democrats know this tool needs to be sharpened.

That is why State Senator Judy Robson is requesting support on this matter and has issued a letter encouraging input from Wisconsin residents. Those dollars confiscated at the pump by Big Oil are lost forever if we do nothing.

In Rock County it is important to write a letter or speak to your Republican Representatives, local newspapers and organizations like the Wisconsin Manufacturers and Commerce (WMC) expressing your views and asking them where they stand. For people or profits? Don’t be discouraged if they sidestep your question or refuse to answer because if they do, you’ll know they’re not for you.

Write to:
Wisconsin Manufacturers and Commerce
Republican Assembly Leader Scott Fitzgerald
Rep. Brett Davis - 80th Assembly District
Rep. Scott Gunderson - 83rd Assembly District
Rep. Stephen Nass - 31st Assembly District
Rep. Thomas Lothian - 32nd Assembly District
Sen. Neal Kedzie - 11th Senate District

Bush Policy: Can it get any worse?

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From the very beginning, one of the things that frosted Bush about Saddam Hussein was the fact that Hussein was dealing oil with nearly everybody in the world except the United States. Afterwards, the Administration with the full cooperation of the media twisted it around and shifted the focus for his own benefit and accused the UN of participating in crooked oil for food deals with Iraq. France, Germany and Russia, and others signed new oil contracts with Iraq just before Bush ordered the invasion. He would have none of it, as commander of the most powerful military on Earth, Bush was prepared to take the oil by force.

Truthout Excerpt:
New Oil Law Means Victory in Iraq for Bush

From those earliest days until now, throughout all the twists and turns, the blood and chaos of the occupation, the Bush administration has kept its eye on this prize. The new law offers the barrelling buccaneers of the West a juicy set of production-sharing agreements (PSAs) that will maintain a fig leaf of Iraqi ownership of the nation's oil industry - while letting Bush's Big Oil buddies rake off up to 75 percent of all oil profits for an indefinite period up front, until they decide that their "infrastructure investments" have been repaid. Even then, the agreements will give the Western oil majors an unheard-of 20 percent of Iraq's oil profits - more than twice the average of standard PSAs, the Independent notes.

Big Oil will rake off up to 75% of all the profits until their “infrastructure investments” have been repaid? Production sharing agreements have their place, but what was so wrong when some Americans asked that oil rich Iraq share in the cost of their own liberation? Dick Cheney railed against the American public when it was suggested that the American treasury be repaid with oil profits from Iraq. He went as far to say that should Americans taxpayers expect to be repaid, world opinion of America would plummet. Could it really have gone any further down than Bush has taken it? Bush constantly reminds us that the insurgents and militias will take the oil profits if we fail in Iraq, as if it really is the only prize worth fighting for.

Consortium News Excerpt:
Not only have possibly hundreds of thousands of Iraqis died as a result, but U.S. forces killed Hussein’s two sons and turned the deposed dictator over to his enemies so he could hanged like a common criminal on Dec. 30.

So there can be little incentive for Iranian or North Korean leaders to follow the Iraq model of disarmament and inspections. Further, the explosion of anti-Americanism in the Muslim world has increased risks to the pro-U.S. dictatorship in nuclear-armed Pakistan, where Islamic militants with close ties to al-Qaeda are reported to be gaining strength.

The remaining two of the so-called axis of evil have nothing to lose now by nuking up. To them, it may be the only thing that can guarantee superpower militaries will not invade.

Out of all the conspiracies and accusations, from the Kennedy assassination to 9/11 was an inside job to the DaVinci Code, none of them are as believable or convincing enough as the evidence available to support the most inconvenient truth of all – that the Bush War in Iraq is all about oil. He is taking us on a ride to nowhere.

Post Election Gasoline Prices

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A letter writer to the Gazette disputed Election Day conspiracy theories regarding the price of gasoline. Claiming that prices did not rise drastically enough afterwards as many had guessed it would.

Unless you haven’t noticed, the price of gasoline has been going up at a pace of a few cents a week since after the election. Beginning in September, oil was going down so fast, many experts thought it would reach $15 a barrel within a year. They implied $1.35 a gallon gasoline was just around the corner.

Earlier in the year, when the prices were high, Bush said there is nothing he could do, after all, he said, “it’s a free market.” But all of a sudden, just before the election, something happened. OPEC, one of the tools of global free enterprise announced it will be cutting production by 800,000 barrels of oil a day. Not because of a hurricane, broken pipelines or a shortage of crude. No sir, they announced the cut in production with only one objective in mind; to stop the price from sliding any further.

Immediately afterwards, several prominent economists and market watchers said the announcement doesn’t carry much weight, that OPEC lacks the discipline to carry out its own threats/goals. Make no mistake, whether or not OPEC actually cut production, the announcement did what it was intended to do. It put the brakes on the declining prices. Around election time, oil prices flattened out, and ever since have been climbing steadily upwards. I can hear people crying foul already, saying Bush has nothing to do with the global price of oil. I would argue that his decisions regarding the middle-east does, but more importantly, mister energy task force himself, VP Dick Cheney held secret meetings years ago with Big Oil in the White House and it can be safe to assume that Big Oil has been given free rein to do whatever it takes to ensure a steady supply of gasoline at the pump. If you have to raise prices to accomplish some level of control over consumption, then by all means, do it. The Bush Administration could care less about high prices, that's “free market” in their view, just don’t repeat the energy crisis the nation experienced in the 70’s with widespread shortages, long lines and rationing. It would doom his presidency. But we'll never know for sure because, the meetings were "secret."

By keeping the meetings secret, the Bush Administration appeared to exercise the idea that energy is a free market untouched by outside forces. There can be no doubt that energy executives see their own interests as bound up with a Republican victory. Certainly they have invested more heavily in buying off Republican legislators than they have their Democratic counterparts.

There is nothing like the good ol'boy free market capitalism espoused by the President and many, many of my fellow Americans. But it is in words only.

JG letter excerpt:
The writer asks the question: So where are the apologies to President Bush and Big Oil from those who loudly advocated these theories?

Although I believe Big Oil manipulates gasoline supply, demand and prices at will, I did not believe prices would jolt upwards after the election. Regardless, nearly everybody thought this would happen and so far, no apologies are necessary. The prediction was as good if not better than the accuracy of tomorrows weather forecast.

Related: Read The coming oil wars, a special report of a three part series by the Chicago Tribune.

Bush Political Capital: Spent on Gasoline

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Republicans are noting with some satisfaction that gas prices are falling. The specter of gas costing significantly more than $3 a gallon this fall had worried Republicans who feared that voters would take it out on their party in November. But prices are well south of $3 and dropping. In Janesville the prices are now averaging about $2.58 a gallon, down from $3.09 a gallon a little over a month ago.

The declining gas prices have left many confused who accepted the idea high prices earlier were because of middle-east volatility, China and India increased demand or simple economic laws of supply and demand. The artificially inflated prices of the spring and summer dampened demand for gasoline in the U.S. which helped increase domestic supplies without finding new oil and put downward pressure on prices, but how does that influence the price of global oil?

However, fears of a total geopolitical meltdown in the Middle East still exist with Iran in pursuit of nuclear technology, Iraq in worse shape than it was three years ago, and a still shaky Israel/Palestinian cease fire. Under past circumstances, the recent attack on the American Embassy in Syria would have caused oil to pop another dollar a barrel overnight. Al-Quada is back in the news threatening more mayhem. The hurricane season is in full swing and will threaten Gulf of Mexico oil facilities into November. But the price of oil is going down.

Other reasons given by experts for the high oil prices earlier was the suddenly new heavy demand from China and India, while others have said we have reached “peak” oil and global supplies will begin to decline and raise prices further. None of this has changed. Throw in the recent Alaskan pipeline failure and the overbearing fear propaganda of the Bush/GOP election and all the ingredients are in place for even higher prices. Because of Big Oil’s ties to the Bush administration and the GOP-led Congress, there are some sound theories that dropping gas prices have more to do with politics than markets.

For instance, at an energy forum held at the Congressional Black Caucus conference last week, Rep. Carolyn Kilpatrick (D-Mich.) suggested the price drop right before the November elections has raised her suspicions. Similar comments were offered on the nationally syndicated Tom Joyner radio show yesterday.

People must remember that gasoline was oddly low during the summer and fall of 2004 and rose steadily to all time highs after the election with all the same excuses in place for the high prices today. The only difference here are the upcoming mid-term elections. President Bush has probably used up what may be the last of his political capital by requesting for lower prices to soften voter rebellion in November. With huge and obscene profits, Big Oil can easily afford to give away a little and undoubtedly owes some favors to the GOP Congress for their loyalty as well.

Venezuela: Friend or Foe?

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On Citgo Gasoline:
Tired of supporting the war in the Middle-east? Start buying Citgo gas. It comes from Venezuela.
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A previous Sound Off caller(above) said we should buy Citgo gas because it comes from Venezuela. Its nationalized by Venezuela; its state-owned, and Hugo Chavez, Venezuela’s president, has sworn to dig the grave of U.S. imperialists. He’s one of the worst U.S. enemies and controls Citgo. I won’t buy it.

This is an interesting comment only because the Bush Administration has no problem in principle buying crude from Saudi Arabia or other Islamic states in the Middle-East. But the Administration views Venezuela as a major problem primarily because the government of leftist President Hugo Chavez has retaken possession and control of their countries most prized natural resource – the oil fields. Chavez has literally cancelled oil contracts and booted out some western oil profiteers and members of the Bush base. There has actually been suggestions to assassinate Chavez from the likes of Christian (thou shall not kill) TV evangelist Pat Robertson. In the meantime, Chavez has donated energy supplies to needy people in the U.S. despite Bush Administrations threats. Charles S. Shapiro, the State Department's principal deputy assistant secretary for Western hemisphere affairs cried foul, said Chavez is providing oil for low-income people not for the sake of monetary profits but for "for political gain." Chavez is no enemy to the people of the United States.

Why its a good idea to buy goods made from state-owned and nationalized forced labor in a communist country like China but a bad idea to buy state-owned gasoline from a democratic country like Venezuela is something only a corporatist can explain.

The reference defending U.S. imperialism is more troubling, assuming the caller supports it. Imperialism draws heavy criticism on the grounds it has been frequently employed for economic exploitation in which the imperialist power makes use of other countries as sources of raw materials and cheap labor, shaping their economies to suit its own interests, and keeping their people in poverty. One can hardly blame that Hugo Chavez opposes this agenda. When imperialism is accompanied by overt military conquest of non-human rights abusing nations, it is seen as a violation of freedom and human rights.

It turns out that the U.S./Venezuela relationship is just another failure of the Bush foreign policy, and unfortunately Hugo Chavez is being driven to ally himself with other troubled and indifferent nations.

Should you buy gas from Citgo? There is no reason not to.