U.S. oil production under Obama has soared, as have oil prices, showing that “drill baby drill” can’t solve our energy security problems.
Our guest blogger is CAPAF’s Noreen Nielsen.
Koch-backed, oil-company funded, Americans for Prosperity recently announced their new campaign attacking the Obama administration for the increase in gas prices. That’s right. The energy industry is set to run efforts to raise public ire at gas prices. Koch Industries and others in the oil industry hope this effort will raise public support for pro-industry policies that put profits ahead of consumers.
KEY FACTS ON OIL INDUSTRIES’ CAMPAIGN:
Ø Industry rallies are sponsored by the multibillion dollar Koch Industries, one of the “world’s top five crude oil traders and key player in distorting oil markets for private profits.
Ø These rallies are strikingly similar to the astroturf “Energy Citizen” rallies of 2009 that were funded by oil-industry lobbyists.
Ø Koch Industries has funded the Americans for Prosperity Foundation and Americans for Prosperity for years, which has supported many Tea Party efforts.
SPECULATION, NOT REGULATION, DRIVING OIL PRICES UP
Excessive Speculation in the Commodities Market is Pushing Up Prices at the Pump
- The world’s largest commodity trader, Goldman Sachs, recently admitted that speculation was to blame for high oil prices, telling its clients that it believed speculators like itself had artificially driven the price of oil at least $20 higher than supply and demand dictate.
- CNBC business reporter Erin Burnett: “A lot of it is a speculation problem, it isn’t supply and demand,” which was echoed by others.
- Oil speculators have doubled their share of oil futures markets since the 1990s, with a ratio of 68 percent speculators to 32 percent users of oil, according to a recentMcClatchy report.
Koch Industries Plays a Key Role In Helping Manipulate the Oil Market for Profit
- A new Think Progress investigation of Koch’s oil speculation business reveals that Koch is perhaps the most important player in distorting oil markets for private profit.
- Koch Industries’ executive actually devised the “first ever oil-indexed price swap,” while also being heavily involved with deregulating oil derivatives in the early ‘90s.
- Since the Koch-Gramm-Enron deregulation bonanza, non-commercial oil speculators have flooded the market and increased the price volatility of oil in leaps and bounds, hurting consumers and businesses across the globe while making a small set of oil barons and financial giants very rich.
- Koch executive even admitted to benefiting from the “Contango Market where crude prices are higher for future delivery.
- Koch is one of the “The World’s Top Five Crude Oil Traders,” according to a slideshow, given to an industry association for oil speculators, describes Koch as the “world’s top five crude oil traders and actively trades about 50 types of crude oil around the world.”
GET THE FACTS ON FAKE INDUSTRY ATTACKS
Despite Big Oil Talking Points, Oil Production Highest Level Since 2003
- The Financial Times reported that U.S. domestic oil production has actually risen to its highest level since 2002. “According to the US government’s Energy Information Administration, domestic production of crude oil and related liquids rose 3 per cent last year to an average of 7.51m barrels a day – its highest level since 2002.”
Oil is priced and sold in a world market, so drilling domestically wouldn’t help bring down prices spikes. The U.S. possess only 2 percent of the world’s oil reserves but use almost 25 percent of the world’s oil.
- According to a CNN report, the amount of extra oil that could be produced from more drilling in this country is tiny compared to what the world consumes.
- Oil is a fungible commodity, meaning there’s really no way to ensure that the oil we produce here, stays here, wrote TIME. Instead, any additional production would be absorbed and digested by the global oil markets, having minimal impact on the prices at the pump.
- Even the Bush Administration stated that additional offshore drilling “would not have a significant impact” on crude oil prices before 2030, because oil prices are determined on the international market.
— Noreen Nielsen