Wednesday, July 16, 2008

National Unity for Food and Fuel Freedom

As the oil price crisis worsened over the past six months, and as contradictions in mainstream media about the cause of the sky high prices became more apparent, we all had to take a crash course on speculation and oil futures manipulation.

Even Americans had to start relying on their own studies and investigations to see through the lies, especially from international business media like CNBC, which try very hard to pass off the inordinate oil price hikes as “supply and demand” driven, blaming China and India, or at the very least, downplay the role of speculators to a minimum, instead of the 60% or so that most honest analysts have been saying.

Today, we have another very important piece of information raised by twelve US airline CEO’s in a position paper calling for “An End to Oil Speculators:”

“Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab. Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs.”

And in each of those twenty times it is traded amongst the oil futures players themselves, the prices just go up and way, way up.

Ed Wallace, writing for BusinessWeek, challenges the official line of the Bush administration and the mainstream business media. In an article on June 27, he cited the following news quotations, which he subtitled, “It was printed in English:”

“‘[U.S.] demand for oil over the first five months of the year was off 2.5%* from last year.’ - American Petroleum Institute, June 18, 2008, Associated Press Online (*Translation: We are using approximately 525,000 fewer barrels of oil per day.)…

Iran has 15 [oil] supertankers idling in the Persian Gulf capable of storing more than 30 million barrels of crude.’ - Bloomberg, June 16, 2008…

‘Thunder Horse started pumping from a single well on Saturday…and on schedule to have the field online by yearend. Thunder Horse alone will increase overall U.S. oil and gas production by 3.6%. Add British Petroleum's Atlantis platform that started up last year, and the boost grows to 6.4%.’ — Houston Chronicle, June 16, 2008…

‘Asian refiners cut West African crude oil imports in June. Asian imports will fall 36%* to 830,000 barrels a day this month from May’s 1.3 million barrels per day.’ — Bloomberg, June 17, 2008 (*Translation: Another 470,000 barrels a day of mostly light sweet crude rejected by the market.)

In a discussion on international cable news, one anti-speculator participant demanded that Bush start releasing the Strategic Oil Reserves of the US to show the seriousness with which the American government will be willing to fight speculation. Such an action would signal to the world that the US, the world’s biggest consumer of oil, will act to collapse the artificially astronomical price of oil today; but Bush and the US government are not budging.

Our thesis that it is the US government under Bush that’s supporting the manipulation of oil prices is buttressed by these facts. Yes, Bush is harming the welfare of his own people to serve the financial interests of the financial class in America and the world. Heck, he cares even less for the rest of the world.

By now many of the readers of this column can qualify to be instructors in Oil Price Speculation and Manipulation 101, and the question arises: What do we do about this to solve the problem for ourselves?

Those who have followed our last columns know the answer to this is for the Philippines to develop its indigenous energy resources, particularly geothermal and hydro-electric, which can both translate to electrolytic hydrogen production from water to fuel transportation.

So, we have it clear in our minds how the problem can be solved; but there’s one stumbling block -- government leadership that kowtows only to the energy plans laid down for this country by the Western economic powers, which constitute Gloria’s Board of Economic Advisers -- and this is not going to change soon.

The nation’s mood is one of frustration and fear -- frustration because no leadership offers any real solutions and fear because of the dim future ahead. The VAT reduction may reduce fuel cost by two to three percent but even if the entire 12 percent is removed, that would only translate to $128/barrel from the latest price of $146 per barrel. $128/barrel-oil is not economically conducive either and the adverse impact will still be devastating.

Waiting for the 2010 elections seems to be such a hopeless exercise because by then, the horse would have already been dead from starvation. We’ve got to start now. If we can have new leadership, our recovery will be fast, as some geothermal power plants can be commissioned as early as eight months from groundbreaking, like the Ormat plant in Nevada, USA.

Gloria is not going to do anything anytime soon to get us out of this crisis. She’s comfortable cozying up to foreign interests that want to keep selling us their expensive fuel and energy.

A regime change along nationalist lines is the imperative today. Ideally, a government uniting the major political and economic constituencies of society -- the Estrada and Cory Aquino groups, the progressive Churches, the patriotic and uncorrupted military and police, the genuine business sector, particularly the medium and small scale players, the labor and peasantry -- under a platform of emergency indigenous energy, fuel and food development will be the battle cry of the day.

Life can be good if we take action. This quarter is willing to help open doors for each and every faction in Philippine society on this basis. We must unite to survive.

(Tune in to: Talk News TV on GNN, Destiny Cable Channel 3, tomorrow, 8:45 p.m. to 9:30 p.m. with former Mayor Jun Simon on “Christianity for a New Philippines”; Kape’t Kamulatan, Kabansa on 1098AM, Monday to Friday, 8:30 a.m. to 9 a.m.; and Sulรณ ng Pilipino every Monday, Wednesday, Friday, 6 p.m. to 7 p.m. on the same station. Also, check out: http://hermantiulaurel.blogspot.com)

The Daily Tribune

July 14, 2008