In California, the lines of customers waiting for gasoline stretch for miles. The price of petroleum products rises almost daily. And the giant oil corporations, pretending helplessness over the phony “crude oil shortage,” are using American workers as hostages and raking in record profits.
Meanwhile, Jimmy Carter, the willing captive of the energy barons, poses as protector of the public interest, intoning fake conservation sermons as he blithely announces the removal of price controls on domestic oil. He buys a decorative wood-burning stove for the presidential mansion, even as the besieged automobile-dependent public nears panic.
Furious Americans, already falling behind in the race with runaway inflation and blackmailed by the contrived shortage of crude oil and gasoline, are forced to subsidize the oil cartels.
Sham Shortage. There is no immediate shortage of world reserves of crude oil, and everybody seems to know it.
Underground oil is many years away from being seriously depleted. The Middle East still has large reserves, and the U.S., which presently produces 50% of its domestic needs, can tap billions of existing and potential barrels of oil, enough to provide energy for decades. The Department of Energy claims a shortage of 500,000 barrels a day, but stocks salt caverns in Louisiana and Texas with 220,000 barrels a day to build up its Strategic Petroleum Reserves!
Since any petroleum held in reserve or left in the ground today will bring higher prices tomorrow, Big Oil and its presidential ally perpetrate the hoax of a worldwide shortage of petroleum to force the consumer to pay more for less. The oil industry stands publicly condemned of outright fraud and arrogant price manipulation for the second time.
Drilling Pocketbooks. The oil moguls are deliberately refusing to drill oil or refine crude oil imports.
Domestic crude oil production has hit an all-time low, dropping 16% since last November. And the refiners slowed production from 85% of capacity to 83% during the first week of May in spite of unprecedented consumer demand for gasoline and pressure from the government to stockpile heating oil for next winter.
1979 oil profits have already reached record levels, surpassed only during the 1973 oil embargo. During the first quarter of 1979, Exxon profits increased 37% over first quarter 1978.
Texaco registered an 81% gain, and Standard Oil of Ohio reaped a staggering 303% increase.
These bumper-to-bumper profits come from drilling the consumer’s pocket dry. During first quarter 1979, American workers suffered an annual rate of inflation of 24.9% for energy costs. And the oil corporations literally have the consumer over the barrel, since one-half of all U.S. energy is produced by using petroleum products.
Carter Tilts at Windfalls. Promising even higher oil profits, Carter declared April 5th that he would decontrol domestic crude oil prices — exactly what the oil profiteers have long demanded. At the same time, armed with a “windfall profits tax” proposal, Carter tried to shore up his crumbling public-defender image by undertaking a mock battle against excessive oil profits.
Carter claimed this tax would capture 50% of the $17 billion that the oil companies stand to gain as the domestic price of $6 a barrel rises to the world market price by 1981.
Within days, however, this beneficent vision was replaced by a more moderate proposal: a levy of 21% which would be allocated to an Energy Security Fund. However, the government proposes to use 76% of this fund to finance a search for new energy sources and then give the research results free to private interests for their enormously profitable development. Thus, taxpayers’ money would be plowed right back into the corrupt energy industry from which it has supposedly been taken.
Carter, at the behest of the oil companies, refused to link Congressional approval of the windfall profits tax to his plans to decontrol oil prices. This virtually assured the defeat of the concessionary tax.
U.S. workers are neither impressed with Carter’s confusing theatrics nor receptive to his lame explanations of the national energy shortage. 54% of 1600 people polled by Associated Press in April believe the energy crisis is a hoax.
Iran As Scapegoat. The administration’s favorite whipping boy for the energy crisis is the revolutionary upsurge in Iran. But the Iranian revolution never created a critical shortage of oil.
Iran’s oil shutdown last December only temporarily disrupted the crude oil market, and oil exporting nations, especially Saudi Arabia, were quick to replace the 5.5 million barrels of oil per day withdrawn from the world market during the anti-Shah strikes and demonstrations. U.S. imports of crude oil have actually risen by 1.5 million barrels between December and March of this year, as reported by the International Energy Agency.
Carter also blames OPEC nations for the crisis, and they obligingly meet periodically to raise the price of oil on the world market, as happened in June. But foreign capitalist interests coincide with those at home — profit for the investor.
The scare campaign was engineered to convince the people that the day of energy reckoning had arrived. The myth that revolution abroad causes hardship at home is strenuously peddled to avoid the danger of revolt abroad spurring revolt at home.
Methodical Madness. Carter’s deceitful energy policies have enabled the oil companies to extort huge sums in consumer dollars to finance the development of future energy resources, while ignoring present needs.
“Decontrolled” domestic oil means more expensive energy, the failure of transportation-connected business such as tourism, loss of jobs, and staggering inflation as consumers plunge more deeply into debt. The energy capitalists prosper, and the people at the bottom — the poor, the old who live on fixed incomes, minorities, women and young people — face the spectre of slow starvation. The people are expected to underwrite the flailing capitalists by drastically reducing their own standard of living.
The labor movement must not surrender to the lies and manipulations of the energy imperialists and the government. Oil and all natural resources must be nationalized and managed by workers’ control and the union movement must start planning now to provide for human needs by organizing a Labor Party that can break the energy barons’ iron grip on the government.
Labor, united against Carter and his big business cohorts, could turn the tables on all of them and guarantee low-cost gas for our cars and buses, low-cost energy for our furnaces and lights, and safe, clean energy alternatives to our current petroleum-based technology.
A simple reordering of priorities from military to civilian consumption would also work miracles in restoring the energy equilibrium.
