$50 a barrel of Oil: Democratic Party Politics
Rizwan Ghani
May 02, 2008
In my article ´oil pricing and Democratic Party, published in the same space on April 23 (http://www.americanchronicle.com/articles/59524) it was shown that a fifty dollar barrel of oil was possible provided Democratic Party was ready to stand up for 45 million Americans living below federal poverty level and some three billion people across the glove struggling to survive under two dollar a day.
The latest standoff between Hillary and Obama over oil pricing shows just how far Hillary is from ground realities.
The mainstream US media has pitched in ´fear mongering´ economic experts who by linking ´higher demand to higher prices´ have hushed the viewers. Similarly, there were voices that any tax on oil companies will discourage investment in refineries and other oil exploration.
Reportedly, US Congress has itself imposed thirty-year moratorium on oil exploration in US. In other words, lawmakers have no plan to ease prevalent prices of oil by opening domestic oil production.
Similarly, there are allegations that oil industry has failed to commission even three new oil refineries in US. It has failed to maintain existing oil infrastructure and rampant corruption in the oil sector has only made matters worse. It is opined that like country´s reeking electricity distribution grids and rusting bridges it is only matter of time that someone from the media will shine light on ´rusting oil infrastructure´.
The OPEC distributors reportedly have told the media that due to scarcity of crude and heavy oil refining facilities worldwide it is difficult to make use of surplus oil in the global oil markets now solely dependent on refined oil.
Independent observers are of the view that due to failure of influential private energy sectors of advanced world to installing/enhancing refining facilities in their domestic sector the oil producing countries have ended up as oil refining sweatshops for the advanced world. Reports show that five Gulf States will invest some 160 billion US dollars in next five years to improve blocks refining facilities but despite earning some 123 billion US dollar profit in 2007 alone allegedly, the big five US energy giants have no plans to extend/expand country´s refining capacity.
Interestingly from 2000 to 2004, the G-7 states made 1,600 billion from oil taxation, as compared to 1,300 billion dollars oil revenue earned by all the OPEC member states. It shows high rate of taxation than availability of oil in the market (Blame G-7 taxation… 8 Feb 08, Arab News).
Obama was right to rebuff Hillary´s 10 billion dollar oil tax relief as ´fumes´ because despite ´fast tracking´ bill would not have made it through the legal process to provide relief at the pumps. It was political bluff played to attract voters for upcoming primaries, which only reflects Hillary´s disregard for economic challenges of average American and her understanding of inside working in Washington, which she calls experience.
The more serious observation is the Democratic Party´s failure to uphold average American´s interest versus the different lobbies of the country that US Supreme Court acknowledged in 1936. The Court sustained one act of New Deal legislation after another, asserting that individual citizens must be protected against overpowering economic groups and from disasters; they have not brought on themselves. Legislative enactments provided for old-age and survivors insurance, unemployment insurance, federal control of various financial interests, minimum wages, supervision of agricultural production, and the right of labor unions to organize and bargain collectively.
The fact of the matter is price of oil can be brought down to 50 dollar a barrel, Iraq war can be ended, minimum wages can be increased, agriculture production can be increased, labor unions can be revived and allowed to bargain collectively but the problem is Democratic Party leadership and party´s presidential contesting candidates have in all probability opted to ignore history of party´s struggle to protect rights of masses for personal gains (for details see Liberalism by Peter Gay, Encarta 2008).
Reportedly, Russia has written off country´s debt and added one trillion dollars to its national exchequer by improving country´s energy sector and today unlike west´s corrupt energy sector Russia´s Gazprom is a shining example of success and helping secure country´s geo-political and geo-strategic objectives with Western conservatives can only dream of. Beijing by improving its relations with Gulf States has reduced oil prices in China by 25 percent. Malaysia has frozen electricity cost until 2009. Many countries from Gulf and Venezuela are using oil revenue to facilitate average person.
The bottom-line is America in step with Gulf, Russia, China has to decide between nationalizing of energy sector for public welfare or allow private sector to pocket the huge profits without sharing the benefit with public despite using the infrastructure that has been built by tax dollars. In all probability like health, insurance and agri-sector there will be little that politicians and lawmakers are willing to do for the average American, which in turn will be the fate of average person across the globe because he or she is stuck in the globalization, which is using Washington business model.
Democratic party is Democratic Party because historically speaking the party stands for vision of enlarging opportunities for an average American to realize full potentialities but it is only possible if Democratic Party is ready to challenge corporate America backed by the Republicans. The way Hillary is dragging Obama down with her negative campaign it is not difficult to auger party´s future in national elections. The by-standing DNC cannot be absolved of its failure to end Hillary´s heading party´s destruction instead of pushing the campaigns to end negative tactics, and pursue solution-based politics. May be it is time Obama returns to his 2004 speech of ending Iraq war, promise energy sector privatization and bring a barrel of oil down to 50 dollars to help provide relief to those struggling within US and rest of the world.
Finally, the math based on Hillary´s $10 billion versus 18 cent reduction in fuel prices on the pumps shows that by using US energy giants 123 billion dollar profit for year 2007 the 3.50 dollar gasoline price can be reduced to 1.38 dollar a gallon. America by charging dollar a gallon (2.38 a gallon) can sustain the energy sector in public sector including maintenance of energy infrastructure and staff salaries. It is hoped that Democrats will come up with a even a better solution than this one or even Gazprom. With America consuming some 20 million barrels of oil daily the American public sector and rest of the world can easily keep gasoline prices well under 2 dollar a gallon for next 50 years even at current oil prices.
The latest standoff between Hillary and Obama over oil pricing shows just how far Hillary is from ground realities.
The mainstream US media has pitched in ´fear mongering´ economic experts who by linking ´higher demand to higher prices´ have hushed the viewers. Similarly, there were voices that any tax on oil companies will discourage investment in refineries and other oil exploration.
Reportedly, US Congress has itself imposed thirty-year moratorium on oil exploration in US. In other words, lawmakers have no plan to ease prevalent prices of oil by opening domestic oil production.
Similarly, there are allegations that oil industry has failed to commission even three new oil refineries in US. It has failed to maintain existing oil infrastructure and rampant corruption in the oil sector has only made matters worse. It is opined that like country´s reeking electricity distribution grids and rusting bridges it is only matter of time that someone from the media will shine light on ´rusting oil infrastructure´.
The OPEC distributors reportedly have told the media that due to scarcity of crude and heavy oil refining facilities worldwide it is difficult to make use of surplus oil in the global oil markets now solely dependent on refined oil.
Independent observers are of the view that due to failure of influential private energy sectors of advanced world to installing/enhancing refining facilities in their domestic sector the oil producing countries have ended up as oil refining sweatshops for the advanced world. Reports show that five Gulf States will invest some 160 billion US dollars in next five years to improve blocks refining facilities but despite earning some 123 billion US dollar profit in 2007 alone allegedly, the big five US energy giants have no plans to extend/expand country´s refining capacity.
Interestingly from 2000 to 2004, the G-7 states made 1,600 billion from oil taxation, as compared to 1,300 billion dollars oil revenue earned by all the OPEC member states. It shows high rate of taxation than availability of oil in the market (Blame G-7 taxation… 8 Feb 08, Arab News).
Obama was right to rebuff Hillary´s 10 billion dollar oil tax relief as ´fumes´ because despite ´fast tracking´ bill would not have made it through the legal process to provide relief at the pumps. It was political bluff played to attract voters for upcoming primaries, which only reflects Hillary´s disregard for economic challenges of average American and her understanding of inside working in Washington, which she calls experience.
The more serious observation is the Democratic Party´s failure to uphold average American´s interest versus the different lobbies of the country that US Supreme Court acknowledged in 1936. The Court sustained one act of New Deal legislation after another, asserting that individual citizens must be protected against overpowering economic groups and from disasters; they have not brought on themselves. Legislative enactments provided for old-age and survivors insurance, unemployment insurance, federal control of various financial interests, minimum wages, supervision of agricultural production, and the right of labor unions to organize and bargain collectively.
The fact of the matter is price of oil can be brought down to 50 dollar a barrel, Iraq war can be ended, minimum wages can be increased, agriculture production can be increased, labor unions can be revived and allowed to bargain collectively but the problem is Democratic Party leadership and party´s presidential contesting candidates have in all probability opted to ignore history of party´s struggle to protect rights of masses for personal gains (for details see Liberalism by Peter Gay, Encarta 2008).
Reportedly, Russia has written off country´s debt and added one trillion dollars to its national exchequer by improving country´s energy sector and today unlike west´s corrupt energy sector Russia´s Gazprom is a shining example of success and helping secure country´s geo-political and geo-strategic objectives with Western conservatives can only dream of. Beijing by improving its relations with Gulf States has reduced oil prices in China by 25 percent. Malaysia has frozen electricity cost until 2009. Many countries from Gulf and Venezuela are using oil revenue to facilitate average person.
The bottom-line is America in step with Gulf, Russia, China has to decide between nationalizing of energy sector for public welfare or allow private sector to pocket the huge profits without sharing the benefit with public despite using the infrastructure that has been built by tax dollars. In all probability like health, insurance and agri-sector there will be little that politicians and lawmakers are willing to do for the average American, which in turn will be the fate of average person across the globe because he or she is stuck in the globalization, which is using Washington business model.
Democratic party is Democratic Party because historically speaking the party stands for vision of enlarging opportunities for an average American to realize full potentialities but it is only possible if Democratic Party is ready to challenge corporate America backed by the Republicans. The way Hillary is dragging Obama down with her negative campaign it is not difficult to auger party´s future in national elections. The by-standing DNC cannot be absolved of its failure to end Hillary´s heading party´s destruction instead of pushing the campaigns to end negative tactics, and pursue solution-based politics. May be it is time Obama returns to his 2004 speech of ending Iraq war, promise energy sector privatization and bring a barrel of oil down to 50 dollars to help provide relief to those struggling within US and rest of the world.
Finally, the math based on Hillary´s $10 billion versus 18 cent reduction in fuel prices on the pumps shows that by using US energy giants 123 billion dollar profit for year 2007 the 3.50 dollar gasoline price can be reduced to 1.38 dollar a gallon. America by charging dollar a gallon (2.38 a gallon) can sustain the energy sector in public sector including maintenance of energy infrastructure and staff salaries. It is hoped that Democrats will come up with a even a better solution than this one or even Gazprom. With America consuming some 20 million barrels of oil daily the American public sector and rest of the world can easily keep gasoline prices well under 2 dollar a gallon for next 50 years even at current oil prices.
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