May 2, 2005
Oil companies blame today's high gas prices on high prices for oil caused by a shortage of crude oil.
In the first place, $50 plus prices of oil on the spot market are not what the oil companies and other big companies pay. They only reflect the speculative fever raging through Wall Street
More to the point, there is no shortage of crude oil – but there is one of gasoline. Not a real shortage – it was created by the big oil companies to drive up the price. Oil companies have been closing down refineries and cutting back workforces.
In 1980 there were more than 350 oil refineries operating in the U.S., according to the American Petroleum Institute. Today, there are only 150! In l990, there were 1,102,856 workers employed by the top 25 oil companies; today there are only half as many, 514,020! Without refineries and without workers, no wonder oil companies can claim a "shortage" of gasoline, and raise prices.
The case of Shell's refinery in Bakersfield, California, is educational. Shell said it would close and demolish the refinery because it wasn't making money. But internal company records turned up that showed Bakersfield was Shell's most profitable refinery, pumping out profit to the tune of 55¢ per gallon. And before the closing, the plant general manager told an employee meeting that Bakersfield would be closed instead of sold because "it does not want the competition"; that is, Shell would decide for itself how much gasoline was put on the market.
Now that oil companies have closed refineries, decimated the workforces, choked off the supply of gasoline, raised prices, and skimmed off billions in profits – they want even more. Cheney and Bush are teamed with that millionaire's club called Congress to make it easy on the other oilmen.
The House of Representatives passed Bush's energy bill that will provide land (old military bases) for new oil company refineries. The bill gives extra tax credits to companies that already get a lot. It relaxes pollution rules so they can poison air and water more freely. And the bill over-rides the local populations – it allows federal agencies to okay refinery construction, regardless of local and state regulations.
The House bill gives away all of that, without requiring any commitments from the oil companies in return. No guaranteed employment levels. No minimum production levels. And certainly no cap on the price of whatever gasoline or heating oil is produced!
In other words, this bill is not aimed at lowering prices – it's aimed at increasing profits to these already fabulously profitable companies.