Arab Oil States, Golden Thrones and Disproportionate Distribution of Wealth

     North Africa is shaking and rattling in the  throes of revolution.   In the last few weeks,   Egypt's  Hosni Mubarak was forced out with his vanishing billions.    Yemen is  in trouble, and  the disease of economic disparity and discontent is spreading rapidly. 
     The latest and most serious?   Libya.  Moammar Gadhafi,  the seemingly demented and murderous leader of Libya, has been  hanging onto power tooth and nail by hiring deadly mercenaries and arming civilians loyal to him.   The global community has ordered economic sanctions against Libya as  it becomes more apparent that thousands of people may have been murdered in his bid to keep power at any cost.  It is evident  Gadhafi is neither  considered  to be a "generous  humanitarian"  or  'concerned' about his people one whit.
     On the other hand, the Sultan of Oman,  Sultan Quaboos, who has sat on his  golden throne  for over 40years in an absolute dictatorship, is apparently more of a gentleman and highly regarded.  What do these two  men have in common? They are both facing  major revolts mounted against them. Why?
      The sad fact is,  the common root factor happens to be that they are dictators  hoarding absolute power,  and wealth that belongs rightfully to the people of their respective countries. There seems to be  a newly discovered awareness of  "disproportionate distribution of wealth" , to say the least.
Why is that not a surprise?  The rot of extreme and obscene greed has finally precipitated  the questioning of the ultimate form of self-defeating  capitalism, the "king", absolute ruler,  greedy dictator, and  rich despot. 

     The Sultan of Oman, being an astute man,  saw the writing on the wall as revolts took place in Egypt and Libya;  he quickly ordered the creation of 50,000 jobs for the starving and unemployed.   Each of those jobs will supposedly pay benefits of about $390.00 per month. To a man that has a starving family, it must seem a fortune.

     Nice, but does it not still  remain a disproportionate distribution of wealth? Are these people totally foolish?  No.   Do the poor have calculators and the internet?  Certainly some must do.   Shall  we shake our heads in awe  as we confirm their calculations?

$390.00 per month x50,000  = $19,500,000 U.S.D.  per MONTH.  Nineteen and one-half million dollars. That sounds like a big bribe, and a lot of money.  WOW, that's $19.5M x12 = $234 Million  U.S.D. per year --mere peanuts  for  a desperate  last-minute  "job creation"  solution  to prevent revolution. 
 That "peace offering" and job creation  "strategy" ought to quell the rebellion and keep the  starving peasants happy?    Should it really, Sultan Quaboos?  No disrespect, but think again. Is it realistic?  No. 

The fact is,  normally Sultan Quaboos  and his Omani helpers   sell off 850,000  barrels of crude oil daily,  at a heady payment of  $120.00 per barrel, using the "latest" cost  figures.

  Let us tickle those those calculator buttons one more time:     850,000 barrels x $120.00 U.S.D. ( per bbl )  = $102,000,000   --per DAY.
 ONE HUNDRED AND TWO  MILLION  dollars each day?   UNbelievably, it will take only TWO days of oil production to pay for the  cost of the entire ANNUAL  BRIBE, a.k.a  "job creation"...a.k.a. desperate move to retain the Sultan's throne.... 

  Where is the REST of  money going, other than into the Sultan's  treasury?

Who is kidding who?  Oman has been considered the "peaceful kingdom" but it is not surprising the people of Oman are angry.  At least SOME of them have calculators.  The fact is, oil wealth and other resources  belong to the citizens of that country.   Resources are no longer the exclusive property of  the rich and powerful, or of foreign interests.
Is there a lesson to be learned here?  I think so.

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Meantime, back in my neck of the woods in Canada during this same crisis,  we are paying $1.30/litre for gasoline,  the price of which has not even  yet peaked. That horrendous price translates to almost $6.00 USD per imperial gallon (4.56 liters) --- which is nothing but gouging and shameful for an oil-producing nation. 

At the same time, Canada  (a.k.a. Big Oil )  exports 1.3M barrels of  dirty crude oil to the USA  every day.  Let's calculate THAT while we are at it:  1,300,000 x120 =  $156,000,000 dollars per DAY.   That is One-Hundred and fifty-six MILLION dollars each DAY.   
We seriously must question  who has the keys to the  golden vault THAT huge pile of loot is being hauled to.  It sure isn't in MY back yard.   It is not in pollution control.  It is not in infrastructure, or in tax reduction. Where is it? 

The fact IS,  in times of international crises,  Canadians should be at least partially shielded by  Canadian production.  Are we, at some time in the future,  to inherit ONLY the stripped,  contaminated land,  water, mutant fish, societal cancers,  and dead soil left from the dirty oil extraction from the  Athabasca tar sands? 

In fact, there is no excuse for gouging at the gasoline pump.   Gasoline at $1.30 a liter  is made with the same process and equipment that gasoline was made with 40 years ago, back  when gasoline was 0.30 per  GALLON .    Nobody has to work too hard to figure out that was about 6-1/2 cents a liter.
It seems to me there's something seriously wrong with OUR  OWN systems of golden thrones and disproportionate distribution of wealth,  never mind those  of madman Gadhafi or gentlemanly Sultan Quaboos.

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Get a Horse ?

On the Road to Blister                          photo by WLK Photography

Might we be reverting to horse & buggy days in North America much  sooner than expected?  Whether in Toronto,   Dallas, or in “Twixley”,  an imaginary village in  Morgidoo’s Christmas Carol, it strikes me that  fuel must ultimately be affordable if it is to be purchased at all.   Does that make sense?
 I cannot imagine any logical  reason why the richest corporations in the world might  need more money for crude oil other than to satiate endless greed, but at the current OPEC meeting in Ecuador, it is likely the collective OPEC eye has been secretly attached to the $100.00/barrel  benchmark with crazy glue  if only because the rest of the world will meekly accept  it.
 According to some, that price is “affordable”.  Really?

Meanwhile, OPEC is estimated by the US Department of Energy  to have suffered through a  miserable year, with a paltry  increase in profits,-- $750B  -- only 32% more than  in 2009. 
Not enough money?  My eyes are misting with sympathy  already.   

Is there ever enough profit in the petroleum industry? Our eyes may be soon be smarting from oil fumes, our lungs may be burning from  sour gas wells, and billions of essential life forms continue to die from sloppy,  ecologically disastrous spills and failures in the industry, but profit for the greedy will never seemingly  be “enough.”   

Apparently there is never enough oil used, either, and few people realize that the automotive industry was borne out of the necessity to use up all that crude oil.  We must therefore immediately devise more creative ways to consume oil  faster since it “reportedly”  disappears within a few weeks like magic when it is  spilled into Gulf sea water and onto pristine beaches.
I wonder how fast oil  will disappear in the freezing waters of the Arctic? Shall delusion prevent  the first Arctic well blowout,   guaranteed to happen in real life, and shall we all breathe a sigh of relief as it freezes into solid  floating islands of oil?  Perhaps the industry will creatively suggest it will help polar bears survive?   Oil packs instead of pristine ice packs.   How helpful.  How absolutely  predictable.

How shall we ever keep up the good work?  National television ads,  courtesy of Cenovus Energy  are currently advertising  how important oil “ is”.    Perhaps they feel additional brainwashing of the North American consumer is essential to justify  their multi-billion dollar expansion program in the oil sands.  Why waste advertising money on Canadians, when the oil will soon be going to China?    Better expand quickly , there is an estimated requirement  for 2011 of only 90 million barrels per day, according to the  International Energy Agency (IEA), but why not go for  100 million barrels per day, or 200 million barrels per day, let us  use it faster, get it all over that much sooner and make even bigger profits?  Perhaps with the total collapse of the petroleum industry, sanity can return to civilization? 

 It is little wonder Alberta  is proceeding full speed ahead with the questionable Athabasca Oil sands projects and planning  pipelines to the west coast.  The necessary supertankers shall be plying  pristine coastal waters ever so carefully just like the  Exxon Valdez did, if only  to enable  shipping Alberta’s oil to China.  Profit is surely  more important than life itself.   That guaranteed  potential of  ecological disaster will help the greening of Mother Earth in Alberta  and ensure the supply of mutated fish for all.   Perhaps economic greed drives both stupidity and insane irresponsibility?

Happily, back at the meeting of OPEC ministers  no “immediate”   intention of raising crude oil prices or changing crude production quotas has been announced  at this moment, a move hardly necessary since they have been known to  cheat in the game of quotas anyway,  but OPEC producers are certainly  not outwitting one another in any bid  to lower prices either.

 Although economic conditions in the good old USA and Europe are substantially dampened at the moment with the global meltdown, international bailouts  and the shady shell games taking place  in all things financial,  with China’s burgeoning economy in an unprecedented growth cycle --in spite of an almost unheard of growth rate and now  a  5.1 % inflation rate, it is quite predictable the busy  Chinese  will consume more oil, store more oil, and  demand more oil, driving total demand and international   prices ever higher.
Should  we carefully avoid mentioning India in the same breath, which now  may be  the fastest growing economy in the world?   In India, modern life is taking hold.  Low-end “family”  cars at a retail cost of $2,000 per vehicles are coming out soon, courtesy of Tata Motors.  Literally millions of them will  be plying cow-paths  in the very near future, with happy owners imagining they are finally living the American dream of owning a car, --and simultaneously lining up for gasoline, each tiny vehicle  spewing pollution into the air in a gargantuan collective effort to catch up to the Chinese, who are already  suffocating  themselves in the worst industrial  pollution in existence.
 
We are all admittedly part of the problem, but even at that, I fail to see why in Canada, our proud oil producing nation, gasoline must be $1.29/liter, which is $5.80 per Imperial gallon.
   With crude  prices close to $90.00/barrel already and difficult winter conditions upon us, the die is likely cast, suck it up,   it will go even higher--- but in Venezuela, another oil-producing nation,  gasoline is sold  for mere cents/liter to it’s citizens, and  happy Hugo wants $100 USD per barrel  or better yet, even more, presumably to teach all North Americans the ultimate lesson in frugality.

We must therefore  remain slaves to OPEC and the petroleum industry and pay the piper, or alternatively,  grow as an advanced civilization, dream of using common sense, become smarter, and go electric.  Electric vehicles are viable and have been since gasoline was invented.
 
Either that or do like the gentle folk in Twixley, and just get a horse.

Got Gas, Mr. Grinch?

BIG OIL                                              photo by r.a. kukkee  2010

With winter close to  full swing and the Christmas season fast approaching,    I thought, (or more likely imagined, suffering from a lack of natural sunshine ),  that  Corporate good-will might flare up for a change ('Tis the season to be jolly  and all that !)

It seems I guessed wrong.  Instead,  it appears  that corporate profits  remain their primary concern, and the Grinch himself is flailing about with much gusto in one  sector  in spite of  the spirit of the season, or the stifled North American economy.

Only a few days ago the price of gasoline once again  skyrocketed like magic,  inexplicably and forcefully,  just in time for Santa  to stuff  great bags of cash  into the bulging coffers, caves and penthouse apartments  of the richest and most powerful corporate elite  in the world.  Who else could that be, but the Petroleum Industry?

The price of gasoline at the pump  jumped more than ten cents per liter,  from $1.09 per liter to over $1.20 per liter  within a day.   Instantly.  Why did the price jump sky-high?   I wonder how that happens?
I am also curious to know 'who' actually makes the calls  to set the new  universal price we see almost immediately at the pumps, regardless of brand.

Let us imagine for a moment THAT  mysterious  “Mr. Who” is on the telephone.
 “ Hello? Is this Joe’s Gas station?  You got gas?  Surprise!   Your gas is a  new, improved price starting right now!”  
“....... But Sir, what about the gas in the  tanks here, should I sell it at  the old price?”
“Are you kidding, Joe?  You a bit stupid or something? Do as you’re told, don’t ask questions, jack up the price on it too,  why not?”  Mr. Who orders with disdain, “After all, what are the peasants going to do about it?”  Mr. Who, ( is he related to the  Grinch, by any chance? ) ,  smirks happily and hangs up.

What just happened at Joe’s Gas station seems to have happened everywhere. How can that be?  How can gasoline prices possibly be so closely orchestrated?

According to www.Oilprice.com,   the price of crude oil was  $89.02 as of Dec. 6th at 10.00 a.m. EST. (1).,    having risen from approximately $85.00 a few days previously.  That equates to a  price increase of  $4.00 US   for a whole barrel of crude oil.
One must immediately wonder how a $4.00 increase in the price of a barrel of crude oil equates to a pump price increases of a half-buck per gallon for  gasoline?  The fact is, it does NOT.  Did all petroleum industry executives fail to get a passing grade in  arithmetic in school?  Perhaps that’s the problem. Perhaps we should calculate it for them.

Let’s see....We know that about  20 US gallons ( 75.70 liters) of gasoline is  produced from each barrel of crude oil.  Crude oil is not all made into gasoline.    Other products such as diesel fuel, home heating oil, and various other oils and lubricants are ALSO  made from the same barrel of crude oil
Any doubt about that?   See for yourself.  Check them out at: http://www.txoga.org/articles/308/1/WHAT-A-BARREL-OF-CRUDE-OIL-MAKES

Regardless, and totally  ignoring price   increases on  other products listed,  the recent  price increase at  your local gas pumps infers  there was  an increase of about  $8.00 per barrel of crude oil.
  ---But wait, Virginia, the real price increase for raw crude oil in that same time period, as we now know, was only about $4.00 per barrel.
Clearly a problem exists. Does price gouging by error, or by design?  Executive ineptitude, or just willful, blatant greed?   Organized criminal activity? Government control? Eyebrow- raising cooperation and a wink  between  oil-producing nations?   Perhaps the reader has other suggestions.
  Who is assigned the responsibility of calculating the price of gasoline, and how does it magically become the new, virtually universal price?

Is this all part of the cute board game called Monopoly?
Should  any thinking individual be expected to actually believe  there are not  cooperative and behind-the scenes forces controlling prices at the gasoline pump?       Huge and instantaneous price increases just do not magically happen, and there is one certainty. The imagination is sorely over-worked to believe it is “competition”.  
 
Vehement denial of unfair practice  is the standard response in any investigation of price-fixing, monopolistic practices or price-setting agreements by Big Oil.
The classic defense offered includes  arbitrary excuses historically used to justify windfall profits.
It is such good fortune we suffer to know why we are being robbed. 
 The search for answers  becomes  a quick  spin on a  “Wheel of Fortune” for which  the consumer must both play and pay.
  The wheel is spinning.... automobile owners everywhere are waiting at the pump with abated breath.....Which of these wonderful excuses shall be offered this time?  

Official List of Excuses and Justifications for Windfall Profits

• The price of crude oil at the pump (Set by Mr. Who?)
•  Global prices (Controlled by Mr. Who?) 
•  Low supplies (Controlled by Mr.  Who?)
•  OPEC policy and agreement changes ( Controlled by Mr. Who?)
•  Corporate losses. (  Details to be offered by Mr. Who?   )
•  The bad economy
•  Competition (we may have to laugh about that one)
•  Bad weather
•  Drilling and exploration costs 
•  Refinery fires and equipment failures
•  The unstable Mid-East and it’s perpetual political unrest, the war against terror (ad infinitum)
•  Shipping accidents   ( the Exxon Valdez, was that oil collected in 5-gallon buckets for resale?....) 
•  Oil spills  and rig fires ( BP Gulf --2010 --all that spilled crude oil in the gulf just “happily” disappeared after a few weeks?)
• Government taxes on gasoline ( the most famous excuse offered in Canada ) 

Understandably, other exciting game features conveniently left off of the sparkling corporate wheel  are:

• Corporate  greed
•  Excessive Profits
•  Multi-million dollar year-end  bonuses for chief executive officers.
• Creative pricing agreements

We have but one question for the petroleum industry:   Which excuse are you going to use this time?  Not that it matters.  At this time of the year even Santa himself would have to call your actions unethical,  opportunistic,  and monopolistic price gouging.

 Naughty, naughty, naughty.   Santa’s list is getting longer by the day.

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