|
Straight Talk About Oil
By David R. Zukerman, NYC and Winsted
 | | Professor Engler speaking to the Bronx Greens on April 8. |
|
It was not that long ago that gas prices in Litchfield County were at humane levels, conducive to an economic glow. The recent sharp hike in gas prices, perhaps some 25% in little more than a month, suggests that someone is capitalizing on the current violence in the Middle East.
From time to time, we are told that oil prices are a function of the economic law of supply and demand. Not if I heard Professor Robert Engler correctly. Engler, professor emeritus at the City University of New York, spoke to the Bronx Greens on April 8. He has written books on the oil industry, including The Politics of Oil, and was a witness in a proceeding on the Exxon Valdez oil spill in Alaska.
Professor Engler told the twenty people at this meeting that the basic aim of the oil companies is access to oil. Access leads to control of access and that, in turn, leads to control of price, technology and market. He believes that merely by advances in technology, there will be substantial savings in oil production without the need for conservation measures. He also points out that references to thirty years of oil reserves, for example, do not mean that the planet will run out of oil in thirty years.
Professor Engler told the Greens that the oil industry fears "competition and low oil prices." Apparently prices are manipulated so that they can be maintained in line with market demand. One example of manipulation in the U.S. is government limits on production at oil wells, which might be limited to, say, eight days a month. Professor Engler acknowledged that the need for conservation might be offered to explain such control, but he clearly believes the overriding aim is control of prices.
He also pointed out that oil producing countries relying primarily on royalties and taxes for income cannot plan a government budget. This concern, he indicated, sparked the establishment of OPEC (the Organization of Oil Exporting Countries), led by Venezuela. Professor Engler wryly pointed out that while OPEC is called a "cartel" in the media, the oil companies are rarely referred to using that term.
Stating that oil has always been a "highly controlled commodity" in the United States, Professor Engler suggested that government reports on oil may originate from the oil industry itself, and he cited one study in support of his argument: a report whose basic change in moving from the oil industry to the federal government was a new cover page, he said.
Decisions taken by the oil industry on placement of pipelines have far-reaching consequences, according to Professor Engler. Responding to a question, he agreed that there is more oil in the Gulf of Mexico than in Alaska, but suggested that the $8 billion investment in the Alaska pipeline helps keep the focus on Alaskan oil.
The Wall Street Journal ran an editorial on April 11 calling for greater use of Alaska as an oil-producing source. The paper claimed that opening the Arctic National Wildlife Refuge to oil production in 2,000 acres of the 1.5 million acres set aside for oil exploration would create 736,000 new jobs and should add $325 billion to the economy.
During his April 8 talk, Professor Engler indicated that he was not sure where the new jobs linked to oil production in Alaska would come from. He noted that the oil companies bring in their own personnel, and added that they even import prostitutes. He also suggested that support for Alaska drilling from Alaskans might be explained by the grants that Alaska pays its residents from oil royalties, an annual "reverse income tax" that might soon reach $1,600 per person, he said.
Professor Engler told the Greens that Afghanistan was seen as a location for an oil pipeline, leaving the group to ponder the possible geopolitical implications of the current incursion into that country (and, indeed, also the Soviet invasion of 1980). He reminded the group that the Taliban was formerly thought to be on our side.
Voice readers might reflect on just one point made by Professor Engler on April 8—that U.S. oil policy "blatantly violates antitrust legislation"—and might wonder when the mainstream media will more closely scrutinize the cost of oil to consumers and to democracy. Professor Engler believes there should be fair access to oil. He then asks if the only way to deal with oil access is "through violence—violence against nature; violence against human beings."
Professor Engler told the gathering that he did not expect American drivers to raise questions about access to oil so long as they have the use of their cars. Perhaps, however, questions would be raised if the media did a better job informing the public about the oil-producing process.
Presently the public is more likely to be given articles like the one in the Washington Post on April 9, with the title "We Can’t Get Along Without Saudi Oil." The writer, J. Robinson West, was identified as "a former assistant secretary of the interior" and, presently, "chairman of the Petroleum Finance Co." This article, appearing the morning after Professor Engler’s very informative talk to the Bronx Greens, validates his point about the very close relationship between government and the oil industry, a relationship that seems to leave the rest of us as bystanders.
Yet Professor Engler was not without optimism. He cited the observation of a friend of his, Fritz (E.F.) Schumacher, that human beings are too clever to survive without wisdom.
| 
)