High Oil Prices? A Win-Win Situation for Bush
By: S. Rowan Wolf, Ph.D., Uncommon Thought Journal May 20, 2004

This work is under a fair use Creative Commons License

Gas prices are climbing at the pump and everyone looks at OPEC, but the reality is that it is US Petroleum companies who are getting the majority of the profit from the price increases. The Democrats have requested that the President release oil from the strategic oil reserves to force prices downward, but the President has responded with that Congress needs to sign his energy bill and "We will not play politics with the strategic petroleum reserve."

Politics hey? Bush is continuing to top off the strategic reserve while costs sky rocket. He is using the cost increase to promote his energy bill (which loosens environmental protections on exploration and exploration and extraction - including drilling in the Alaskan National Wildlife Refuge). Meanwhile the lions share of the increases are actually linked to Bush's policy regarding mergers at oil refineries (Bush Refinery Policy Blamed for High Fuel Prices, Record gas prices in Nevada; Sen. Reid blames industry greed, Shell denies greed spurs the closure).

And the oil companies are making a killing:

In his floor speech, Reid singled out first quarter profits for some of the biggest oil companies: - BP, up 165 percent - Chevron-Texaco, up 294 percent - Conoco-Phillips, up 44 percent - ExxonMobil, up 125 percent

Of course, the oil-soaked administration (including Bush) are winning hand over fist.
Even if Bush's energy policy was sound (which it is not), it would do absolutely nothing about current prices. It would not do anything about the expected increases throughout at least the rest of the summer.
The oil price run up is all about politics - Bush style politics. From possible agreements with the Saudis, to his so-called "energy plan."

5/18/04 Press Briefing by Scott McClellan " Q The Democrats are out there today saying that the high gasoline prices, high oil prices are having an effect on everything from the airlines -- which have to spend an extra $180 million a day for every penny the price of fuel goes up; consumers are feeling the pinch, as well. Does the President accept the Democrats' argument that high gas prices are having a detrimental effect on the economy?
MR. McCLELLAN: John, I think the American people deserve more than cheap political rhetoric. The American people deserve leadership and action. This President has led and acted. This President, when he came into office, worked to develop a comprehensive energy plan that would reduce our dependence on foreign sources of energy. He has led and acted, and he has called on Congress to act.

Unfortunately, Senate Democrats have held up moving forward on a comprehensive energy plan. They have obstructed the process. So we continue to find ourselves in the same situation year after year. The reason we are in this situation is because we are dependent upon foreign sources of energy. The reason we are in this situation is because there has been years of inaction. This President has acted. This President has put forward a plan. And this President has called on Congress to act, and that's what Congress needs to do, so that we don't continue to go through this issue year after year. "

So if prices stay high, Bush and his primary industry profit. If the political pressure is to pass Bush's "energy" plan (made with the help of Enron) then Bush and Co. still win. If gas prices erode the economy further, and drop Bush's poll numbers lower, then he will bring the prices down with a couple of phone calls, and a dramatic move where he takes the credit and he wins again.

Of course, his continued economic, and eventual political profit from this all depends on an electorate that doesn't know what the heck is going on.

But there is a looming issue that few want to look at - disappearing reserves. In a Sacramento Bee article, Shell denies greed spurs the closure, Les Clark who runs an independent oil producers association said: "Most folks know oil won't be there forever."

That is the one thing we can surely count on.

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