Opinion Editorials, August 2011

Campaign to Drive Down Oil Prices and Create Jobs

By Steven Moyer

I believe we can improve our economy by focusing on oil fundamentals and energy conservation combined with a government program to tax oil-based fuels, provide credits to poor people, and promote alternative fuels. 

I'm working on a proposal to the Synergy Nation to create jobs by reducing the cost of energy, primarily oil products.

Here are some of my comments and notes:

We need to examine the actual SUPPLY of oil that is available now. There are tankers full of crude oil sitting in the Gulf of Mexico and other places because they aren't needed. The oil terminal in Oklahoma is flush with oil.

The demand for oil is dropping in the United States, China and Europe. There is a persistent myth that the amount of oil the world needs is going to exceed the supply that is available. But the facts do not support this conclusion.

Actually, the IEA estimates that we will have an abundance of oil at least until 2014. Remember that estimates of future need are based on a number of assumptions, many which have been false when examining history.

Also, the longer this oversupply condition ( some call it an "oil glut" ) persists the longer it will persist because new oil sources are being developed. If you examine "Peak Oil" predictions in the past you will find that they have ALL been wrong.

That is, if you consider the key point of the prediction an ACTUAL shortage of supply. Peak Oil is a "price perception myth" that is disconnected from the fundamentals of supply and demand. We are "living in our heads" when we believe in "Peak Oil" theory.

Remember that we can make synthetic oil from coal and we can get it from tar sands and shale and we can release it from the Strategic Petroleum Reserve. Other countries can do these things as well. So if we don't have enough oil it is because we aren't doing the right things rather than some actual "supply scrunch."

I suggest one of the first things we should do is put a focus on how "Energy Conservation creates jobs." How's that? Every dollar that is diverted from the oil industry into the local economy will serve to create local jobs. If you save $100/month on gas and heating oil then you have $100/month more to spend in your local economy.

That's where we should put the focus. Stop depending on major corporations or the government to create jobs. They can both do so, and they should do so, but we can create jobs by conserving energy.

Then we can ask the government to end the speculation in oil futures which serves to increase the price of oil products. We can also directly confront OPEC and assert that we need a different type of institution, not a cartel, to manage the world's oil reserves and prices intelligently.

Those who support "market ideology" ought to be calling for it in the oil market. We have an excess of supply therefore the "rules of the market" dictate that the price should decline.

Current prices:  http://oil.nodes.org/   Oil is currently $82/barrel. Two weeks ago it was $100/barrel.
The correct price for crude oil now is about $50/barrel.

http://crude_oil_oversupply.news.nodes.org  ( do a search and see! )

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