Energy

The Price of Oil
Prices of fuel and other goods, especially those that are imported, were quite high not long ago. Diesel fuel, used by the large trucks that transport much of our goods, remains higher in price than gasoline.

The trucking industry had a very difficult time dealing with the extremely high diesel prices. An increase in transportation cost contributes to the inflation engine among many other products.

If the fuel price were to get to $4 per gallon again in the U.S. and remain high, broccoli or lettuce could rise above $3 per bunch, and a loaf of bread could go past $4.

Oil, gasoline and diesel prices will climb again over time, probably with brief falls back in price and temporary price plateaus.

Something dramatic like an expansion of war in the Mideast, a terrorist attack on a production facility, or a natural disaster affecting production, could push the oil price up rapidly.

Added to natural market incentives for raising price, the Israeli invasion of Gaza was an impetus to the price of gasoline being bumped back up by 30 to 50 cents a gallon over its low point.

Watch for additional news events that can be used as a rationale for producers and refiners raising oil, gasoline and heating fuel prices. 

Even if we do not see $150 per barrel oil, and $5 per gallon gasoline as some forecasters expected before the dramatic price drop, oil at even $50 to 75 per barrel with $2 to $3 per gallon gasoline still contributes significantly to the cost of all transported goods.

In addition to fuel uses, oil is the source for agricultural chemicals used around the world. An extreme rise in oil prices could result in diminished crops and worsen famine around the world.

 

Basic Oil Market Structure
About 60% of the price of oil goes to the source supplier, with approximately 20% for refining and 20% for distribution and marketing.

~ Producers - Oil producers prefer a high price, but they earn profit whether the price is high or low. As long as they recover more than their production and marketing expenses, they earn money.

~ Refiners - For oil refiners it is not so much about whether the prices of oil and gasoline are high or low. The spread between the cost of crude oil and the wholesale price of gasoline is the profit zone the refining industry has.

They need to have a nice crack in that spread to make good money. The gap is usually greater when industry prices are high.

Most of the brand name oil companies refine their own oil. The ones who get squeezed in a down market, when there is usually a smaller spread between oil and gasoline prices, are the smaller independent refiners who have to buy market crude.

~ Retailers - The retail filling stations actually make more money when the price of gasoline is not very high. The retailer gains only 2 to 5 cents per gallon of gasoline whatever the price is.

The items sold in the convenience store of most gas stops are far more profitable than the gasoline. When consumers have some cash to spare beyond what they spend on the gas, they buy a lot more in the convenience shop.

~ Support Businesses - drillers, pipelines, equipment providers, and shipping and trucking services, are some of the peripheral industries of oil. They do okay in most economic conditions, and the best when oil and gasoline are flowing strongly through the system.

The large oil companies are producers, refiners and retailers. They make money no matter what! Record oil company profits were reported for 2008, a recession year with oil and gasoline prices on a roller coaster.

 

How Did The Price Get So High?
The extreme high prices of oil and gasoline we experienced in the last year were not because of an oil shortage. It happened for several reasons:

~ profit gouging - A major factor of high price is the profit interests of the TICK royalty and corporations that own or process petroleum.

The gasoline industry itself is also responsible for unnecessary increases in gasoline prices. They often jack the gasoline price right after the price of oil goes up, even though the gas they currently serve was from oil drilled weeks or months earlier. 

The price is also immediately increased based on any news that is considered an influence, such as war activities in the Middle East.

 

~ dollar down - The declining value of the dollar from excessive U.S. government borrowing and spending is another reason for higher oil price. The dollar weakens in value with more and more being issued.

The U.S. has paid more than a trillion dollars just for oil in 2008. The recent extremely high oil prices were like a tax increase of 30-40% on oil, and contributed to the current serious recession.

Ironically, much of the U.S. expenditures have been due to the highly expensive corporate wars in Kuwait, Iraq and Afghanistan.

An increased oil price is partly a war tax from the expanded government borrowing and purchases for war, the tremendous use of oil for military activities, and other expensive defense projects.

(Question: Why does the United States sacrifice so many lives and spend so many billions of dollars to provide military protection and financial assistance to some of the wealthiest oil producing nations without reimbursement from them?)

 

~ high demand & limited supply - OPEC, still dominated by Mideast royalty, tends to fleece the world’s consumers by holding back supply.

Demand for oil has doubled in the last 30 years, but production has increased very little. OPEC's long term strategy centers on limiting the amount of oil on the market to sustain or drive up the price. This is done in part to put a squeeze on western economies, especially the United States economy.

 

~ futures contracts - Speculation by investors in oil futures can also effect the price of a barrel of oil.  Bidders on futures contracts expecting soaring prices drove the cost of a barrel of oil to nearly $150.

The big investment banks were selling commodity contracts on oil. The constant drumming by salesmen that the oil prices would go a lot higher, resulted in the contract price being bid up and up.

The record high price of oil put a squeeze on the whole economy. Ultimately it formed the dart that popped the oil balloon, starting a chain reaction of popping balloons. With the balloons deflated the economic basket has been falling to a crash.

 

Down Low
Investors finally realized that the price of oil had been bid up artificially higher than anyone expected, far beyond what would have resulted from normal market forces. As the economy slowed and demand for oil diminished, the volatile price fell rapidly.

When the oil bubble burst, the losses on commodity contracts contributed to the financial disaster that led to the bailout.

Another reason the oil price temporarily fell is that major consumers of oil, especially China, had been able to purchase oil futures contracts some while back at a low oil price. These came to term for delivery at the about same time that growth in demand for oil fell off with the developing recession.

 

Cartel
The oil industry has operated primarily as a cartel from the start. The big oil producers and marketers are the mega players that have strategized and manipulated the oil market for over a century.

As an example of corporate profit strategy trumping the public good, General Motors bought up efficient electric trolley systems in many cities in the 1920's and 30's and replaced them with their own gasoline buses. As they raised fares, they simultaneously encouraged people to each have their own car.

Similarly, the oil companies have bought up many inventions and technologies that were more efficient than oil and gasoline or a better alternative, and they eliminated them to protect their oil interests.

Beyond that, the cartel has jockeyed to make oil and natural gas essential resources to consumers, businesses and governments. In the process they have influenced other industries, such as automobiles, agriculture and medicine, and suppressed or retarded anything that might reduce oil consumption.

 

Oil Strategies
Lindsey Williams is a best-selling author whom I have met and worked with personally on a book compiling the articles of several authors including myself.

Rev. Williams was the chaplain for the Alaskan oil pipeline construction workers, including the executives that managed that operation. He was privileged to sit in meetings with oil higher-ups and has inside contacts who know the whole story.

Williams believes that the "peak oil" concept (the idea that we have passed the midpoint in oil reserves) is a myth perpetrated by the powers that be.

There are many other oil market experts that agree.

Oil is NOT at all the result of billions of years of decaying plant and dinosaur remains, as the oil interests have mythologized for the purpose of characterizing oil as very scarce.

It is now believed that the earth produces oil continuously from deep within, and that oil fields are gradually replenished naturally.

Williams says in his book The Energy Non-Crisis that there is enough oil and natural gas readily available in Alaska to serve the current and projected needs of the United States for over 200 years.

These resources are being held back, purportedly as "national security", but it is really done in concert with the interests of all oil producers to limit production.

Controlling output helps producers sustain as profitable a price for oil and gas as possible.

( CLICK HERE to play a video of Lindsey Williams speaking.)

Concerns over environmental deterioration from oil drilling are valid. Still, it is possible to extract oil and natural gas with negligible environmental impact but at modestly higher cost.

Even though "global warming" from human actions is a TICK hoax, greener alternatives than oil are a better choice for reducing pollution. However, we do have the oil available to tide us through while those are developed.

 

Gasoline Cost
The price of gasoline has already been more than the equivalent of $10 per gallon in other parts of the world. In Europe, greater taxes on gasoline make it much higher than in the U.S.

The TICK likely intends to raise the gasoline taxes here in the U.S. as well as globally as part of their agenda. The "global warming" "carbon footprint" propaganda is preparing the way for it.

When gasoline cost is low, it is more beneficial for the world economy, as goods can be moved to various destinations at reasonable expense. The recent higher prices of oil and gasoline were not because the underground stock of oil has greatly diminished.

High gasoline prices are a reflection of a combination of a weakened U.S. dollar, investor speculation, and the profit motive.

Profit and market control have motivated OPEC oil producing nations to restrict production increases for many years.

 

The Global Oil Game
As demand was growing phenomenally around the world over the last quarter century, oil production was held back to create a shortage on the market, and volatile but generally high prices. 

By hidden collusion, the nations and companies that control most oil production effect the price by adjusting production.

The oil kings are experts at ripping off the world. Part of their intention is to be able to bring everyone else to their knees if they choose so.

The oil, natural gas and nuclear mega billionaires and their TICK allies have endeavored to keep the world's population mainly dependent on the resources they control in abundance.

Then they are able to influence various other players by manipulation of the oil and gasoline prices.

The current lull in oil prices may be encouraged by OPEC as it has greatly reduced oil revenues for their competitor, the Russians. This is hurting their economy, and the Russians are not happy about it.

On the other hand, the earlier very high oil prices were putting a brake on the economic growth in China. Eventually they were able to purchase large contracts for oil at a savings, which contributed to lowering the world price.

With the recession, demand for Chinese products fell off, so their oil needs have been lessened.

However, China now has serious challenges to work through as a result of the reduction in exports. Unemployment and financial stress are moving people to civil disturbances there.

Although the Chinese government holds trillions of U.S. dollars, they cannot flood the world economy with them, or it would undermine the dollar and worsen their export position. They need to encourage their exporting for the growing population to be employed.

It is likely that China will be less inclined to continue buying U.S. treasury notes and supporting the U.S. dollar. If China backs off, the dollar will fall in value to some degree, raising the cost of oil again.

A new gasoline high price squeeze would be especially harmful for Americans. The economy is already weakened from excessive debt at every level, deterioration of the manufacturing infrastructure, and years of subpar political leaders. A serious spike in oil and gasoline prices could trigger a further collapse of the vulnerable U.S. economy.

Natural gas prices were also climbing higher until late 2008, similar to the prices of oil. If natural gas and heating oil rise in price again, winter heating bills could become beyond the budgets of most people, businesses and organizations.

TICK controllers intend to bring the United States to its knees economically by undermining the U.S. economy and destroying the dollar while they still have us as captive customers.

At a time the TICK decides it is appropriate for their plans, filling up a car with gasoline and heating our homes will become more expensive again.

Energy Alternatives

Nuclear Power
Another energy issue is nuclear power.  Fission nuclear power plants are highly dangerous to human life. Thus far disasters have been few, but very harmful when they occur.

Major earthquakes or terrorist acts involving nuclear plants could be devastating.  It is crucial to stop the expansion of fission nuclear power and its terrible toxic waste until safer reactors, possibly using cold fusion technology, are properly developed and in place.

 

Safer, Cleaner Options
There are other energy resources than oil and nuclear power that are just as effective or better. Solar, wind, bio-fuels and hydrogen options are already viable. Electric batteries for storage and use of power are becoming more important. There is also still a great amount of coal available in the U.S.

 

Green Technologies
There are good reasons to rapidly develop alternative energy resources. Solar, wind, ethanol, hydrogen, clean electric, LED lighting and other alternatives are already in the marketplace.

Coal can economically be broken down to make a cleaner fuel, with purer carbon left over to burn in electric plants.

There is a new type of solar energy film, even a solar "ink" with which you can create low level solar collectors with your computer printer. This will make solar energy affordable for everyone to use in their home.

 

Bio-Fuels
Although less productive for fuel, the waste materials of food crops are much less expensive as an energy resource than the foods themselves. We need our food crops to meet the needs of hungry people around the world.

An important way to have abundant food and bio-fuels availability is increasing vegetable gardening in back yards, unused city lots, open fields, etc.

Workshops to teach and encourage consumer food and bio-fuel production and processing will ease global food shortages and keep food prices reasonable, while providing sustainable cleaner energy at lower cost.

You can probably run your automobile as it is right now on as much as 50% alcohol (ethanol). This clean burning fuel can easily be made from a variety of plant materials. There is no need to reduce food production in favor of ethanol, as the refuse of a crop can be processed into it.

Recycling of used cooking oils is another bio-fuel market. Converted diesel vehicles can run on food oil wastes from restaurants and institutions. This oil can also be used for heat.

Having your own stock of fuel for transportation and heating needs allows you to function off grid. Power generators run by fuel, including alcohol, can complement solar and wind sources to run a home or business.

There are even newer technologies in development that may solve our need for clean abundant energy. However, there is a history of vested energy interests blocking or impeding such new breakthroughs.

We have the oil and natural gas reserves to tide us through until these better energy sources are well-established. However, the TICK manipulates oil production for their own purposes.

 

TICK Control
The historic practice of The TICK is to hide, undermine or squelch decentralized energy technologies. They want to keep the population dependent on the "scarce" resources they control.

The TICK seems to be now moving to incite economic upheaval, social disruption and consequent increased control measures before decentralized energy methods become commonplace.

 

Summary

Although the gasoline price was significantly lower not long ago, it has moved somewhat higher with more increases to come. Expanded government spending with the financial bailout and stimulus spending will likely bring a return to inflation and higher prices for most items.

With general inflation, combined with limited production by the oil kings, gasoline prices are destined to rise again, spurring even greater inflation.

It is of utmost importance to develop alternative energy sources and delivery systems as soon as possible. Decentralized fuel access and on-site energy production and/or storage are essential to true energy independence.

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