Behind Jr.’s ‘Energy Crisis’
Pumping Up Prices
Even with right-wingers digging in all over Washington, George W. Bush is too prudent to grapple with the environmental movement head-on without some sort of protective rationale. So Shrub has concocted an energy crisis to account for his reversal on carbon dioxide controls, the jettisoning of arsenic standards, and the easing of auto-emission regulations. This doomsday talk is meant to provide justification for other unpopular choices, like drilling in pristine wilderness.
Dubya’s main economic adviser, Lawrence Lindsey, put it bluntly: “We have a major energy crisis. We have a choice in this country of having the lights on or, at least in the short run, having more carbon dioxide.” The president’s wacko energy secretary, Spencer Abraham, who adamantly refuses to step in to regulate the interstate price of electricity to give California a little breathing room, said on Fox News: ” . . . the fact of the matter is there is not a big generator in the basement of the Department of Energy. I can’t just push a switch and send electricity around the country.”
During the campaign, Bush never talked about an energy crisis, instead basing his rationale for drilling in protected areas on overreliance on foreign oil supplies. “Dependence upon foreign crude puts the nation at risk,” he said back in the fall. Duh.
In fact, at an OPEC meeting in Caracas last year, Iranian delegates predicted that the group would soon reduce—not increase—production because of an anticipated recession this spring. While these ominous signals were sent around the world, the happy-go-lucky boomsters on Wall Street were pushing tech stocks ever higher. Right on schedule in recent weeks OPEC indicated that it would indeed slash production. Neither the looming recession nor the so-called “energy crisis” came out of thin air. They were signaled far in advance by OPEC.
What the energy industry now wants is for Bush to accelerate the push for natural gas, because it’s a relatively clean-burning fuel—a fact that could appease environmentalists who oppose further drilling. Energy execs are seeking to drill for gas in the Rocky Mountains, where deeply buried supplies are expensive to get at. They’re also hoping to pull gas from underground reservoirs in Alaska and ship it by pipeline to the Lower 48. And some execs think there’s gas to be found by drilling along the shores of Lake Michigan.
Problem is, in the “free market” the only way to make gas drilling in these locales profitable is to use the industry’s monopoly to bump up prices. The best way to do that is to manufacture an energy crisis.
After all, it’s a time-honored strategy. Every time industry wants to hike prices, the U.S. has had an energy crisis. Ever since oil was drilled in Pennsylvania and the Rockefellers built their fortune on monopolizing railroad pricing, the oil and gas men have dreaded the prospect of surplus ruining their profits. To avoid that prospect, the big companies formed a cartel in the Mideast to control the worldwide flow of oil. Standard Oil of New Jersey joined with the German giant I.G. Farben in another cartel to control development of a process that turned coal into oil, a technology the energy-scarce Germans later used to their advantage in fueling the Luftwaffe during World War II. Under the New Deal, the petroleum industry sought to control surplus through the Connally Hot Oil Act, which allowed state legislatures, usually dominated by Big Oil, to regulate the flow of oil.
As far back as the ’20s, amid an industry-induced alarm that the world would soon exhaust its oil supplies, the U.S. had an “energy crisis.” In the ’70s, the industry said we were running out of natural gas. At the time, the oil and gas companies were angling to end federal regulation and let the free market—oil-speak for monopoly control of production, distribution, and processing—take over. Big Oil was buying up companies in other energy fields such as coal and uranium just in case a “free market” entrepreneur might try to end-run them.
Now they’re back at the trough, again trying to pump up prices. Previously, Public Citizen charged big energy combines in Texas—some of them big Bush campaign funders—with rigging the California market by passing along jacked-up prices to state consumers. On Monday, The New York Times described how El Paso Natural Gas Co., a major pipeline operator supplying the California market, allegedly used a company affiliate that produces gas to drive up prices. The company called the accusations “ludicrous,” saying it was trying to do California a favor. California is challenging El Paso in a case before the do-nothing Federal Energy Regulatory Commission, a supposedly independent body, which is heavily influenced by Mr. Free Market, Spencer Abraham.
Some numbers about electricity you ought to know before the blackouts begin (as compiled by Tod Hettenbach of Gristmagazine.com):
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Additional reporting: Rouven Gueissaz and Adam Gray