Whenever corporate executives are summoned to testify on Capitol Hill, you can bet it’s for the wrong reason.
The recent testimony of Big Oil executives is a classic case-in-point. Marketed to the public as a stern interrogation of those mainly responsible for the nation’s rapidly deepening energy crisis, the whole thing was utterly faux, a true dog-and-pony show.
The real problem is much deeper than just the practices of the oil corporations. It is: a) Peak Oil, and b) the deep inability of our overclass even to admit the Peak Oil problem exists.
Exxon-Mobil, to take one major example, is one of the largest non-state oil producers in the world. It is a dominant force in the oil states that remain too weak and corrupt to nationalize their production schemes — in places like Indonesia and the Niger Delta countries, and in the United States, which, despite its long-lost self-sufficiency, remains a serious petroleum producer. In such abject places, E-M produces a large amount of crude oil, something like 3-4 million barrels a day.
Now, E-M is indeed a huge corporation that enjoys oligopoly power within its market. Hence, it will always engage in price gouging. Indeed, that’s one of the top reasons why all big businesses exist — to escape full-on price competition and to gouge whenever they can.
But despite the big oil corporations’ record profits, their pursuit of price gouging probably explains no more than 10 percent of the current price of gas at the pump. If the implied claim of Congressional (and other) demagogues — that it’s all price gouging, and nothing deeper — were true, then the record profits would be ten times what they actually are. If corporations could still get barrels of oil for $25, but sell gas to Americans for $4.00 a gallon, we’d be hearing about 380% or 3800%, not 38%.
In reality, below the real but thoroughly secondary problem of corporate price gouging, the fact remains that two much more fundamental things are quite real, no matter who is doing the drilling:
1. It is getting significantly harder to find new oil fields and keep existing ones going at present rates. The world’s remaining supply of in-the-ground petroleum is peaking, if not already declining.
2. Drilling for petroleum is itself extremely petroleum-intensive. You need lots of heavy machinery to drill and transport the product, and it also costs a great deal of energy to explore and test for new fields. E-M is not lying when it says its costs of production are rising quickly.
So, the whole focus on the oil companies, sick and brutal as they are, is simply a distraction.
We ought to form a National Energy Planning Administration that operates like the Pentagon. This new effort should include a new Manhattan Project working to coordinate the radical reconstruction of the nation’s transportation, residential, and production infrastructures so as to put energy conservation truly at the top of the agenda. It also ought to compete fiercely with Exxon Mobil and others in the production of energy, including a drive to scramble like hell to make and distribute as much wind, water, and solar technology as makes sense, before we run out of the inherited hydrocarbon inputs those things will require.
Of course, as things stand, none of this is going to reach the agenda, because it’s all a huge death knell for corporate capitalism, which cannot persist as a dominant force without the energy squandering automobiles-first arrangement we are now stuck with and forbidden to question. In the end, our problem is really cars and capitalism, not oil. That’s the secret to why this extreme global emergency remains “off-the-table,” and why our “leaders” are pointing their feigned anger at the icing rather than the cake. Like the idea that thoroughly money-centered, social-climbing CEOs are unaware of their own salaries, it’s a flimsy hoax.
So, what should we do? Well, as MLK said, privileged classes never surrender their privileges without strong resistance.
The starting point for strong resistance is seeing and telling the truth.