Oil Speculation and Republican Cynicism

Once again the Republican filibuster machine has blocked a vote on legislation desperately needed to help solve our energy crisis and lower the high cost of fuel. The Democratic-sponsored bill (S 3268) was intended to curb the ability of speculators to manipulate the oil market. It would also close a loophole that allows speculators trading on the London oil market to escape scrutiny by U.S. regulators. Experts have testified that wrongful speculation has vastly increased the price of oil and that if the bill was passed and signed by Bush, it would immediately lower the price of gas.

While the Democrats have been trying to pass legislation that would have an immediate effect, Republicans have been trying to get Congress to open-up vast areas of the continental shelf and all of the Artic National Wildlife Refuge to drilling. The Republicans’ proposals would not have any impact for decades, if ever. The Republicans know this. Their only reason for this policy is political.

According to Bush and the Republican demagogues in Congress, the problem is supply and demand. They say that all we have to do is increase drilling in order to lower the price of gas. On March 5, 2008, Bush lied when he said: “It should be obvious to you all that the [gasoline] demand is outstripping supply, which causes prices to go up.” Business Week reported on April 1, 2008: “There's no shortage of gasoline or oil in the U.S. today, and we have near-record reserves on hand.” The New York Times reported on April 20, 2008, “What was striking about this latest milestone ($116 per gallon) was what didn’t happen: there was no shortage of oil, no sudden embargo, no exporter turning off its spigot.”

The Republicans in Congress are engaged in an act of extraordinary mendacity and cynicism. They realize that in the coming election they are in danger of being thrown out of office, so they have seized upon a phony issue in the hope that it will get them reelected.

On June 26, 2006, the Senate Permanent Subcommittee on Investigations (PSI) issued a bipartisan report which stated that “there is substantial evidence that the large amount of speculation in the current market has significantly increased prices.”

The PSI report then indicated that there was no shortage of oil supply. It said: “Although there has been a worldwide growth in demand for oil, there has also been a corresponding growth in supply, hence no shortage. In fact, global oil supply has generally exceeded demand in recent years.” The PSI went on to say that stockpiles of oil have been growing, and that no shortage of oil was anticipated in the future.

The Department of Energy forecasts that global surplus production capacity will continue to grow to between 3 and 5 million barrels per day by 2010, "substantially thickening the surplus capacity cushion."

Republicans know that there is no oil shortage and that none is anticipated. They know that even if Congress opened up the continental shelf and the Arctic National Wildlife Refuge to drilling, oil companies would not be able to start drilling there for over 10 years and that it would not do anything to lower the price of gas.

In addition, Republicans know that the oil companies already have millions of acres of offshore and onshore lands and thousands of oil leases where they could start drilling now but have not yet begun. If they were to begin drilling in those permitted areas they could reduce or eliminate our dependence on foreign oil. The Republicans have blocked legislation that would require the oil companies to either develop the leases they already have or forfeit them.

Republicans know that the public mistakenly believes that opening up new areas for drilling will lower the price of gas. For purely political reasons they are frantic to force the Democrats into a vote on the issue. As a result, they are filibustering everything else. For example, on July 26, 2008, they used a filibuster to block consideration of a bill (S3186) that would increase funding for the Low Income Home Energy Assistance Program (LIHEAP).

So this is what it has come to; Democrats trying to do something about the energy crisis, and Republicans denying heating and cooling assistance to poor people, lying to the voters, and licking the boots of the oil companies.