Energy Wars

The end of the fossil fuel era may end with a whimper, not a bang -- just with lines for gasoline that are too long. Consider these two pieces of unsettling data: (1) The number of cars on the road globally will hit 1 billion by 2011. (2) The world's oil will peak by 2015, according to the CEO of Shell.

WASHINGTON -- Two years ago, the Alberta government parked a huge dump truck on the National Mall in Washington, announcing to U.S. lawmakers Canada was about to become the next big thing in global energy. It was an ostentatious display -- the yellow behemoth used in oilsands extraction stood five metres tall, with four-metre-high tires -- that helped put Alberta's oilsands on the map for a Congress deeply worried after 9/11 about the security of the U.S. energy supply.

What's up with oil prices? Well, it's not speculators, and there's no relief in sight, meaning at least five more years of high prices with no easy fixes. The ugly truth? Peak oil isn't fringe anymore-it's going mainstream. That's the reading from the latest oil market report from the International Energy Agency, the rich-country energy watchdog. The IEA's latest x-ray of the oil market includes plenty of disturbing nuggets.

As Americans struggle with high prices at the pump, one thing is certain: a rush to drill in Alaska or on Western public lands will not bring down the price of gas. Unfortunately, it will needlessly sacrifice wilderness and wildlife.

On June 3 of this year, Dr. Mark Cooper, director of research for the Consumer Federation of America, correctly outlined the problem to the Senate Committee on Commerce, Science and Transportation:

U.S. federal oil and gas royalties are payments made by firms to the federal government in exchange for the opportunity to explore for oil and gas on government-owned land or water. Traditionally, most of the funds generated by these royalties have gone directly into the general U.S. Treasury. Some of the funds have been directed to the Historical Preservation Trust Fund and the Land and Water Conservation Fund. During most of the twentieth century, oil and gas companies generally paid between 12.5 and 16.7 percent in royalties for a lease to drill on public land or water. Over time, these royalty payments generated over $100 billion in revenues.

U.S. public lands estimated to hold 31 billion barrels of oil and 231 trillion cubic feet of natural gas WASHINGTON, D.C. -- With average national gas prices hovering around $4 per gallon, the Department of the Interior's Bureau of Land Management today released a study that shows vast untapped oil and natural gas resources exist on public lands in the United States. "America has abundant energy resources," said Assistant Secretary of the Interior for Land and Minerals Management C. Stephen Allred. "However, for a variety of reasons, many of these resources are not available for development. At a time when energy prices have reached record levels and Americans are feeling the impact, we must find ways to develop those key energy resources that are available to us right here at home, on our public lands."

For 16 days, they blockaded the halls of congress. For 16 days, they chanted in the streets. Until finally, victory was theirs… the bill was struck down, the enemy bested. They sang the national anthem and raised their fists in victory. Senator Carlos Navarrete, leftist leader of the Mexican senate, was especially joyful. "We triumphed! We triumphed!"he said.

If you want to flush out market manipulation, don't turn to the sleuths in Congress. They've been probing trading of the oil markets for two years and completely missed a company at the center of the action. During that period, a barrel of crude oil has risen from $50 to $140, leaving a wide swath of Americans facing a choice this coming winter of buying food or paying their heating bill.

Congress has always had a soft spot for "experts" who tell members what they want to hear, whether it's supply-side economists declaring that tax cuts increase revenue or climate-change skeptics insisting that global warming is a myth.

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, American officials say.

The number of Americans who believe that the war in Iraq was a mistake has surpassed the number who felt the same way about Vietnam during that war. At the same time, a much quieter U.S. military build-up is underway on another continent. The ultimate objective of the two efforts is the same: securing Big Oil's access to the regions' oil. The impact in Africa will likely be the same as in Iraq: perpetual occupation, instability, and growing anti-Americanism.

NEW YORK (Fortune) -- "Make no mistake about it," U.S. Rep. Bart Stupak, D-Mich., said Monday while chairing a meeting of the House Energy and Commerce subcommittee on Oversight and Investigations. "Excessive speculation in commodity markets is having a devastating effect at the gas pump that is rippling through our entire economy."

So now we know who's really responsible for $4 gas. Finger-pointers from Washington, the International Monetary Fund, and even Saudi Arabia no longer seem to buy the idea that the demand for oil around the world is simply growing faster than the supply, driving prices to record highs close to $140 per barrel. There must be a more nefarious reason, it seems. So now entering this drama is a villain everybody can hate: The Evil Speculator.

Oh, no, they told us, Iraq isn't a war about oil. That's cynical and simplistic, they said. It's about terror and al Qaeda and toppling a dictator and spreading democracy and protecting ourselves from weapons of mass destruction. But one by one, these concocted rationales went up in smoke, fire, and ashes. And now the bottom turns out to be....the bottom line. It is about oil.

In November 2002, before the invasion of Iraq, then secretary of defense Donald Rumsfeld told Steve Kroft of CBS that U.S. saber-rattling toward Iraq had "nothing to do with oil, literally nothing to do with oil." In 2003, Rumsfeld called the assertion that the United States had invaded Iraq to get at its oil "utter nonsense." ("We don't take our forces and go around the world and try to take other people's . . . resources, their oil. That's just not what the United States does.") In 2005, speaking to American troops in Fallujah, Rumsfeld reiterated the point: "The United States, as you all know better than any, did not come to Iraq for oil." Strong denials for sure, but were they true?

The Bush/McCain gas price escalation is an Enron rerun. It is Chapter 2 of the scam that Bush crony "Kenny Boy" Lay used in 1999-2001 to steal $100 billion from California ratepayers.

ELIZABETH, Colo. - Suddenly, the economics of American suburban life are under assault as skyrocketing energy prices inflate the costs of reaching, heating and cooling homes on the distant edges of metropolitan areas.

SANTA BARBARA -- John McCain came to California promoting an array of ideas to spur the market for clean cars and otherwise reduce carbon emissions. But in this coastal city, the site of a disastrous oil spill in 1969, the presumptive Republican presidential nominee was dogged by critics at nearly every turn for his recent embrace of offshore drilling.

Everyday -- and around the world -- we are seeing the significant negative effects that high energy prices have on our economies, our industries and, most profoundly, on our citizens. We face an extraordinary set of circumstances that demands responsible action from producing and consuming nations alike.