Oil breached $135/barrel for the first time ever wrecking havoc in the Stock Market, in Congress and on Main Street. Fingers are pointing left and right on why oil prices are seemingly out of control. CNBC conducted a poll “Tell Us: Who’s to Blame for America’s Oil Crisis?” In their poll, Congress is the leading culprit.
Congress has its own opinion and Big Oil is squarely in the bulls-eye. In a demonstration of their concern, they marched the oil company executives in for a round of questioning this past week. The hyperbole is even louder on the campaign trail as increased taxation on the oil companies is shouted every day. Apparently the CNBC crowd hasn’t bought into this rhetoric, but if that poll was conducted on a general news outlet – I would bet that Big Oil is public enemy number one.
To get beyond the hype I like to turn to the alternative media outlets. Take a listen to the first 15 minutes of Jim Puplava’s latest Financial Sense Online podcast “The Oil Crisis: Keeping it Simple”.
Puplava boils it down to a few issues:
- Oil discoveries peaked in the 60s.
- Most of the giant oil fields discovered 50-60 years ago are declining and new discoveries are much smaller
- Since 1985 have failed to discover the amount of oil used every year
- Growing demand from China, India and OPEC.
- Oil producing countries subsidize oil, thus no incentive to reduce consumption
- US imports 70% of all of its energy needs including refined products since we don’t have sufficient refining capacity
- DEMAND is 87million barrels a day and SUPPLY is 85 million barrels a day
The bottom line is that Exxon Mobile (XOM) or Chevron (CHX) can’t address those issues and increasing their taxes is not going to solve squat. When OPEC imposed an embargo on the West in 1973, Brazil vowed never to be at the mercy of imported oil again. Today Brazil is energy independent. What is it going to take for America to get beyond Senate hearings – $5 or $6 gas?
It is time for us to start holding our elected politicians feet to the fire. No comprehensive energy policy – No Vote for You. If we vote enough of them out of office – they will stop pointing fingers and do something.